Cash balance and calculating returns

I have a few questions to clarify:

  1. For the portfolio summary, there is a cash balance beside the current value. Could I confirm if the cash balance is included in the calculation of returns, both XIRR and time-weighted? I’m still trying to understand the cash balance function in stockscafe.

  2. The XIRR value is slightly lower than the % change for ‘P&L + Div + Closed (P&L + Div)’. Is this because XIRR takes into account the transaction fees too?

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No, cash balance is not included. If you can see the cash balance, it means that it is included in the computation of Total Capital and Total Portfolio in the Portfolio Summary page.

Personally, I use cash balance to know how much cash I have in each of my trading account. That is how I split my portfolios in StocksCafe. I have “Standard Chartered SGD”, “Standard Chartered USD” and “Standard Chartered HKD” and as dividends are paid out, they are auto-included into Cash Balance and that is how I know how much cash I have without having to login to Standard Character trading account. (If there are too much cash, I am usually tempted to find stocks to buy).

This is a more difficult question to answer. XIRR computes the IRR (Internal rate of return) since inception whereas ‘P&L + Div + Closed (P&L + Div) %’ simply take the current value divide by Max Deployed Cost which does not consider when Max Deployed Cost is achieved. I would choose XIRR anytime :slight_smile:

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Thanks Evan for the explanation!

Does that mean if I select the checkbox ‘add to cash balance’ when making a new Buy transaction, the cash balance will be reduced by the equivalent buy amount?

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Yes! You are right :slight_smile:

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Thanks Evan! I realise I cannot edit past transactions. If I want to include a past transaction to be part of cash balance, I need to delete it and re-enter?

Yes, you would have to delete and add again.

And that was a deliberate choice. Past cash transactions should not be edited often. But of course, if you find a use case where it is important to edit past cash transactions regularly then I should perhaps add that ability.