The Average Stock Cost Calculator is a vital tool for investors looking to understand the true cost basis of their stock holdings, especially when shares are purchased at different times and at different prices. When you buy shares of a stock on multiple occasions, each purchase might have a unique price and quantity. To accurately calculate your profit or loss upon selling, or to understand your overall investment's performance, you need to know the average cost per share across all your purchases.
This calculator simplifies that process. It allows you to input details for each time you bought a particular stock, including the price per share and the number of shares purchased. The tool then aggregates this information to compute a weighted average cost per share.
How it Works (The Math):
The calculation is a form of weighted average. Each purchase contributes to the average based on the amount spent. The formula is as follows:
Step 1: Calculate Total Cost for Each Purchase
For each individual purchase, the total cost is:
Total Cost (Purchase N) = Purchase Price (N) × Quantity (N)
Step 2: Calculate Total Investment Amount
Sum the total costs of all your purchases:
Total Investment = Σ [Total Cost (Purchase N)]
Step 3: Calculate Total Quantity of Shares
Sum the quantities of shares from all your purchases:
Total Quantity = Σ [Quantity (N)]
Step 4: Calculate Average Cost Per Share
Divide the total investment amount by the total quantity of shares:
Average Cost Per Share = Total Investment / Total Quantity
For example, if you buy:
Purchase 1: 100 shares at $50/share = $5,000 total cost
Purchase 2: 50 shares at $60/share = $3,000 total cost
Total Investment = $5,000 + $3,000 = $8,000
Total Quantity = 100 + 50 = 150 shares
Average Cost Per Share = $8,000 / 150 shares = $53.33 per share (approximately)
Use Cases:
Calculating Capital Gains/Losses: When you sell shares, you need your cost basis to determine the taxable gain or loss. The average cost per share is crucial here.
Performance Tracking: Knowing your average entry price helps you assess how well your investment is performing relative to the current market price.
Rebalancing Portfolios: Understanding your cost basis can inform decisions about selling certain assets to reallocate funds.
Tax Reporting: Accurate cost basis is essential for filing taxes correctly, avoiding overpayment or underpayment of taxes.
Using this calculator ensures you have a clear and accurate understanding of your investment's cost, empowering you to make more informed financial decisions.
var purchaseCount = 1;
function addPurchaseInput() {
purchaseCount++;
var newDiv = document.createElement('div');
newDiv.className = 'input-group';
newDiv.innerHTML = `
`;
document.getElementById('additionalPurchases').appendChild(newDiv);
}
function calculateAverageCost() {
var totalInvestment = 0;
var totalQuantity = 0;
var hasError = false;
// First purchase
var price1 = parseFloat(document.getElementById('purchasePrice').value);
var quantity1 = parseFloat(document.getElementById('quantity').value);
if (isNaN(price1) || isNaN(quantity1) || price1 < 0 || quantity1 < 0) {
// Handle initial input errors if they exist (e.g., empty fields)
} else {
totalInvestment += price1 * quantity1;
totalQuantity += quantity1;
}
// Additional purchases
for (var i = 2; i = 0 && quantity >= 0) {
totalInvestment += price * quantity;
totalQuantity += quantity;
} else if ((document.getElementById('purchasePrice_' + i).value !== " && isNaN(price)) || (document.getElementById('quantity_' + i).value !== " && isNaN(quantity)) || price < 0 || quantity < 0) {
// Only flag error if an attempt was made to input invalid data or negative numbers
hasError = true;
}
}
var resultDiv = document.getElementById('result');
if (hasError) {
resultDiv.innerHTML = 'Please enter valid numbers for all inputs.';
resultDiv.style.backgroundColor = '#ffc107'; // Warning yellow
resultDiv.style.color = '#333';
} else if (totalQuantity === 0) {
resultDiv.innerHTML = 'Enter purchase details.';
resultDiv.style.backgroundColor = 'var(–success-green)';
resultDiv.style.color = 'white';
} else {
var averageCost = totalInvestment / totalQuantity;
resultDiv.innerHTML = 'Average Cost Per Share: $' + averageCost.toFixed(2) + '';
resultDiv.style.backgroundColor = 'var(–success-green)';
resultDiv.style.color = 'white';
}
}