Stock Average Calculator

How to Calculate Stock Average Cost

Calculating the average cost of your stock purchases is crucial for tracking your investment performance and determining capital gains or losses. This guide will walk you through the process of calculating the average stock cost.

Stock Average Formula

The formula for calculating the average stock cost is:

$$\text{Average Cost} = \frac{\text{Total Cost}}{\text{Total Shares}}$$

Where:

• Total Cost = Sum of (Number of Shares × Price per Share) for each purchase
• Total Shares = Sum of all shares purchased

Calculation Steps

1. Record the number of shares and price per share for each purchase.
2. Calculate the total number of shares by summing all share purchases.
3. Calculate the total cost by summing the cost of each purchase (shares × price).
4. Divide the total cost by the total number of shares to get the average cost.

Example Calculation

Let's calculate the average cost for the following stock purchases:

• Purchase 1: 100 shares at $50 per share
• Purchase 2: 50 shares at $45 per share
• Purchase 3: 75 shares at $55 per share

Step 1: Calculate Total Shares

Total Shares = 100 + 50 + 75 = 225 shares

Step 2: Calculate Total Cost

Total Cost = (100 × $50) + (50 × $45) + (75 × $55)

Total Cost = $5,000 + $2,250 + $4,125 = $11,375

Step 3: Calculate Average Cost

$$\text{Average Cost} = \frac{\$11,375}{225} = \$50.56\text{ per share}$$

Therefore, the average cost per share for these purchases is $50.56.

Visual Representation

This bar chart illustrates the price per share for each purchase and the calculated average cost. The average cost (in red) provides a clear visual representation of how it relates to individual purchase prices.