How to Calculate Net Gain or Loss

Calculating net gain or loss in an investment.

When putting your money into an investment vehicle, such as stocks, you need to keep track of your gains or losses. This helps you understand how your investment is performing, and if you need to adjust your investments. This is also important when you sell and have to figure out how much tax you have to pay, or what kind of deduction you might have. No matter what kind of investment, net gain or loss is simply the difference between amount paid and amount recovered.

Step 1

Calculate the total amount invested. If this were a stock, you would multiply the number of shares by the cost of the shares. As an example, if you purchased 100 shares of stock ZZZ for $10 per share, you have have invested $1,000.

Step 2

Determine the total amount received for the sale of your investment. If you sold them for $15 per share, then you grossed $1,500.

Step 3

Subtract the total investment from the total return. In the example, you would subtract $1,000 from $1,500 resulting in a net gain of $500. If the number was negative, then you would have incurred a net loss. If you want to get more precise, you can also factor in any additional costs or incomes.

Step 4

Subtract any costs associated with the investment. As an example, if you incurred a $25 fee to purchase the stocks and another $25 when you sold the stocks, then your fees would total $50 and your adjusted net gain would be $450, i.e., $50 in fees subtracted from the $500 calculated previously.

Step 5

Add in any income gains, such as dividends. If you received $100 in dividends, then your new net gain would be $550, i.e., $450 calculated previously plus the income gain of $100.

Step 6

Express your net gain or loss as a percentage by dividing it by the original investment and multiplying by 100. In the example, you would divide the net gain of $550 by the investment of $1,000. You would then multiply the result by 100 to convert the decimal to a percentage. This results in a net gain of 55 percent.

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