The cost foundation is the unique fee of an asset for tax purposes. The value foundation does consist of buy charge, inventory splits, dividends, and return of capital distributions. Being a stock investor, the inventory value basis calculator assists in deciding the following parameters.
The inventory average cost basis calculator makes use of the components below for calculating the stock basis.
Cost basis = (P1 × Q1 + P2 × Q2 + ... + Pi × Qi ) / N
where:
N = Q1 + Q2 + ... + Qi (Total number of shares bought)
P1 = Number of 1st shares purchased
Q1 = Shared price of 1st shares
P2 = Number of 2nd shares purchased
Q2 = Shared price of 2nd shares
Qi = Number of last shares purchased
Pi = Shared price of the last share
A price common calculator determines the value foundation of an funding or asset, generally for tax or financial reporting purposes.
Example:
XYZ Company purchased 100 shares of stock. The current price per share is $10,000. The company bought the first 50 shares at a price of $5,000 each and the second batch of 50 shares at $10,000 each. Let’s calculate the stock cost basis, stock profit, profit percentage, and total shares.
Solution:
Step 1: Calculate the Stock Cost Basis
Total Cost Basis = Cost of First 50 Shares + Cost of Second 50 Shares
Total Cost Basis = (50 * $5,000) + (50 * $10,000)
Total Cost Basis = $250,000 + $500,000
Total Cost Basis = $750,000
The stock cost basis for XYZ Company is $750,000.
Step 2: Calculate the Stock Profit
Current price per share = $10,000
Stock Profit = (Current Value of Shares) - (Total Cost Basis)
Stock Profit = (100 shares * $10,000) - $750,000
Stock Profit = $1,000,000 - $750,000
Stock Profit = $250,000
The stock profit for XYZ Company is $250,000.
Step 3: Calculate the Profit Percentage
Profit Percentage = (Stock Profit / Total Cost Basis) * 100
Profit Percentage = ($250,000 / $750,000) * 100
Profit Percentage = 33.33%
The profit percentage is approximately 33.33%.
Step 4: Summary of Results
