How to Calculate Stock Profit Percentage
The sole purpose behind investing in stocks is to maximize profits. These profits can be computed easily, but in order to gauge the true relative change, one will have to look at the percentage gains or losses. Moreover, there are additional add-ons which you will need to take into account to get a near accurate measure of your return.
Instructions
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For simplicity, get in touch with your broker who will do the necessary calculations for you. This may be important as you may have bought various shares at different times which will result in different pricing associated to your portfolio. In that case, you will need to calculate the percentages separately before adding up the total.
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Now let's look at a simple example. In order to calculate the percentage gain, you will simply take the value of your gain and divide it by the purchasing amount.
The simple formula will look like this: (Selling Price – Purchasing Price/ Purchasing Price)
If you bought the share for $10 and you sold it for $15, then your overall gain will be $5. In order to compute the percentage gain, simply divide the amount by the purchasing price which will reflect a 0.5 gain. By multiplying it by 100, you will get the percentage increase, which in this case is 50 percent. -
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If you don’t intend to sell your stock but still want to calculate the value, take the current market price as your reference. In the above scenario, you have gained from your overall investment.
However, the scenario may be much more complex when you take other considerations into account. You may need to add the broker’s commission fee, and all other costs related to your stocks during the time of selling. If you have more than one share, then you will multiply the total cost with the number of shares. In cases where you bought the shares at different times, calculate all values separately before summing up. Incorporating all these costs will give you a more accurate representation of your relative gains or losses.
The following formula can be applied:
[(Selling Amount – Purchased Amount) + Income Gain – Costs]/ Purchases Amount x 100
