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XIRR is an Excel (R) tool which is used to calculate annualized yield of irregular cash flows. That means, if the cash flows are not regular (either in terms of date or amount), then this tool can be used to calculate the annual yield.

The formula to calculate XIRR is given below.

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Consider the below table which gives the cash flows at irregular intervals.

Date Cash Flow
01-Jan-16 -90000
10-Jan-16 2300
14-Jan-16 7000
27-Jan-16 4600
03-Feb-16 7800
19-Feb-16 8000
23-Feb-16 17000
04-Mar-16 -5600
06-Mar-16 45000
07-Apr-16 24000
08-May-16 25000
06-Jun-16 -8500
18-Jun-16 30000
30-Jun-16 14000

Let us see how to calculate XIRR in Excel.

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We can see that XIRR is 14.51%.

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