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How to calculate IRR (Internal Rate of Return) in Excel and Google Sheets
Excel & Google Sheets
=IRR(B2:B6)Try it with your data
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Step by step
- 1Enter your cash flow values into a column, with negative values representing investments and positive values representing returns.
- 2Select an empty cell where you want the IRR result to appear.
- 3In Excel or Google Sheets, type the IRR function using the range of your cash flow data as the argument.
- 4Press Enter to calculate the IRR.
Tips
- Ensure your cash flow data includes at least one positive and one negative value to get a meaningful IRR result.
- Be aware that IRR assumes cash flows occur at regular intervals.
- Check for errors like #NUM! which can occur if there is no solution for IRR.
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Frequently asked
What does a negative IRR indicate?
A negative IRR indicates that the investment is expected to lose money.
Can IRR handle irregular cash flows?
No, IRR assumes regular intervals between cash flows. For irregular cash flows, use XIRR.
Why might I get a #NUM! error?
A #NUM! error can occur if the IRR function cannot find a result, often due to insufficient cash flow data or all values being of the same sign.