Calculating Compounded Growth & the XIRR Function

[SJT]

I have a series of all positive numbers for which I would like to calculate
the compounded growth rate per period. However the XIRR function requires at
least one positive and one negative value. Is there an alternative that will
allow me to calculate the compounded growth rate using all positive values?
Thank you in advance for your cooperation.

 

[Fred Smith]

No.

All rate of return calculations need at least one positive and one negative
number. If you are dealing with starting and ending values (eg, invested $1000,
got back $1200), you just change the sign on one of them to get the return
calculated.

To help you further, we need to know what the 'positive numbers' represent. Are
they cash flows, period ending values, or periodic returns?

 

[SJT]

They are monthly revenues. Thank you for your assistance.

 

[Fred Smith]

OK. Presumably at the end of the period, the revenues have grown to some final
figure. You would create a table of the revenues in one column, and the
corresponding date in another. The last entry would be the value the revenues
have grown to (as a negative number), and the valuation date.

Feed these two ranges to XIRR, and it will calculate the rate of return for you.

 

[SJT]

Thank you very much for your assistance.

OK. Presumably at the end of the period, the revenues have grown to some final
figure. You would create a table of the revenues in one column, and the
corresponding date in another. The last entry would be the value the revenues
have grown to (as a negative number), and the valuation date.

Feed these two ranges to XIRR, and it will calculate the rate of return for you.