What is XIRR?
The standard IRR assumes cash flows happen at equal intervals, such as once a year. In reality, investments, loan drawdowns and returns happen on specific dates. XIRR, available in Excel, Google Sheets and other tools, uses the exact date of each cash flow to calculate an annualised return.
How to use it
In a spreadsheet: =XIRR(values, dates, [guess])
- Values: cash flows, with money invested as negative and money received as positive.
- Dates: the matching date for each cash flow.
- At least one negative and one positive value are required.
Example
- 1 Jan 2025: invest −$10,000
- 1 Jul 2025: invest −$5,000
- 31 Dec 2025: receive $2,000
- 30 Jun 2026: receive $15,500
XIRR returns the single annual rate that makes the net present value of all these flows zero, here roughly 12% to 13% a year.
XIRR vs IRR vs ROI
- [ROI](/glossary/return-on-investment-roi): simple total return, ignores time.
- IRR: time-weighted, but assumes regular periods.
- XIRR: time-weighted with exact dates, best for irregular flows.
Uses
- Measuring returns on investment portfolios or SIPs
- Private equity and venture capital fund performance
- Comparing project returns against a [hurdle rate](/glossary/hurdle-rate)