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Finance
XIRR
Extended Internal Rate of Return — a way to calculate the annualised return on investments with irregular cash flows and different dates.
XIRR is more accurate than simple CAGR when cash flows are irregular (common in private equity, angel investing, or staggered investments). Excel and Google Sheets have built-in XIRR functions.
It's the true yearly growth rate when money goes in and out at different times, not just in one lump sum.
Real world: You invest £5,000 in January, add £2,000 in June, and withdraw £9,000 in December. XIRR calculates your actual annualised return considering the exact timing of each cash flow.
💡 XIRR gives you the real return when money moves in and out at different times.