Enter the average stock purchase price ($), the average stock selling price ($), and the total number of stocks purchased into the Average Return on Stocks Calculator. The calculator will evaluate and display the Average Return on Stocks. 

Average Return on Stocks Formula

The following formula is used to calculate the Average Return on Stocks. 

AROSP = (SP-PP)/PP  *100
AROS = (SP-PP) * S
  • Where AROS is the Average Return on Stocks (%)
  • SP is the average stock purchase price ($) 
  • PP is the average stock selling price ($) 
  • S is the total number of stocks purchased 

How to Calculate Average Return on Stocks?

The following example problems outline how to calculate Average Return on Stocks.

Example Problem #1

  1. First, determine the average stock purchase price ($).
    • The average stock purchase price ($) is calculated to be : 50.
  2. Next, determine the average stock selling price ($).
    • The average stock selling price ($) is measured to be: 75.
  3. Next, determine the total number of stocks purchased.
    • The total number of stocks purchased is found to be: 80.
  4. Finally, calculate the Average Return on Stocks using the formula above: 

AROS = (SP-PP)/PP *100

The values given above are inserted into the equation below and the solution is calculated:

AROS = (75-50)/50 *100 = 50.00 (%)

FAQ

What is the significance of calculating the Average Return on Stocks?

Calculating the Average Return on Stocks helps investors understand the performance of their stock investments over time. It provides a metric to compare the profitability of different investments and make informed decisions about buying or selling stocks.

How does the purchase price and selling price of stocks affect the Average Return on Stocks?

The purchase price and selling price of stocks are crucial in determining the Average Return on Stocks. A higher selling price compared to the purchase price results in a positive return, indicating a profitable investment. Conversely, if the selling price is lower than the purchase price, it results in a negative return, indicating a loss on the investment.

Can the Average Return on Stocks formula be used for any number of stocks?

Yes, the Average Return on Stocks formula can be applied regardless of the number of stocks purchased. It is designed to calculate the average return per stock, making it a versatile tool for investors to assess the performance of their investments, whether they have bought a single stock or multiple stocks.