The Excel XIRR Function

Related Functions:
XNPV Function
IRR Function
Internal Rate of Return

The Internal Rate of Return indicates the profitability of an investment and therefore is commonly used in business, when choosing between investmentments.

This calculation uses a schedule of payments (including an initial investment, along with the net income payments), to calculate the compounded return, assuming the Net Present Value of the investment is zero.

The value of the XIRR is calculated as the value of rate that satisfies the following equation:

Xirr Equation

where Pj is the j'th payment, dj is the j'th payment date and d1 is the 0'th payment date.

Basic Description

The Excel XIRR function returns the Internal Rate of Return for a supplied series of cash flows (ie. a set of values, which includes an initial investment value and a series of net income values).

Unlike the Excel IRR function, the series of cashflows for the XIRR calculation do not necessarily have to be periodic.

The syntax of the function is:

XIRR( values, dates, [guess] )

Where the arguments are as follows:


A reference to a range of cells containing the series of cash flows (the initial investment and the net income values).

(Must contain at least one negative and at least one positive value).

A series of dates, corresponding to the cash flows.

The first date is the start of the loan/investment period and the subsequent dates refer to the income values. Therefore, subsequent dates must be later than the first date.

An initial guess at what you think the IRR might be. This is an optional argument, which, if omitted, takes on the default value of 0.1 (=10%).

(Note: the [guess] is only a value for Excel to start off working with - Excel then uses an iterative procedure to converge to the XIRR).

Note that the dates should be input as either:


Warning: If you attempt to input the dates in text format, there is a risk that Excel may misinterpret them, due to different date systems, or date interpretation settings.

XIRR Function Example

In the spreadsheet below, the cashflow for an investment is shown in cells B2 - B7. The initial investment of $100 is shown in cell B2 and the net income over 5 periods is shown in cells B3 - B7.

Cells C2 - C7 show the dates for the cashflows.

The XIRR function in cell D2 shows the calculation of the Internal Rate of Return after 3 periods and the function in cell D4 shows the Internal Rate of Return after 5 periods.

Example of use of the Excel XIRR Function
Excel XIRR Function Results

Further information and examples of the Excel Xirr function can be found on the Microsoft Office website.

XIRR Function Errors

If you get an error from the Excel Xirr function this is likely to be one of the following:

Common Errors

Occurs if either:

  • the supplied values and dates arrays have different lengths;
  • the supplied values array doesn't contain at least one negative and at least one positive value
  • any of the supplied dates precedes the first supplied date;
  • the calculation fails to converge after 100 iterations.
#VALUE!-Occurs if any of the supplied dates can't be recognised as dates in Excel