Financial Statement Analysis
 Ratio Analysis of Financial Statements (Formula, Types, Excel)
 Ratio Analysis Advantages
 Ratio Analysis
 Liquidity Ratios
 Cash Ratio
 Cash Ratio Formula
 Quick Ratio
 Quick Ratio Formula
 Current Ratio
 Current Ratio Formula
 Acid Test Ratio Formula
 Defensive Interval Ratio
 Working Capital Ratio
 Working Capital Formula
 Net Working Capital Formula
 Changes in Net Working Capital
 Change in Net Working Capital (NWC) Formula
 Cash Flow from Operations Ratio
 Cash Flow Per Share
 Cash Reserve Ratio
 Operating Cycle Formula
 Current Ratio vs Quick Ratio
 Bid Ask Spread
 Liquidity vs Solvency
 Liquidity
 Solvency
 Solvency Ratios
 Equity Ratio
 Capital Adequacy Ratio
 Liquidity Risk
 Altman Z Score
 Turnover Ratios
 Inventory Turnover Ratio
 Accounts Receivable Turnover
 Accounts Receivables Turnover Ratio
 Accounts Payable Turnover Ratio
 Days Inventory Outstanding
 Days in Inventory
 Days Sales Outstanding
 Days Sales Uncollected
 Average Collection Period
 Days Payable Outstanding
 Cash Conversion Cycle
 Cash Conversion Cycle (CCC) Formula
 Fixed Asset Turnover Ratio Formula
 Debtor Days Formula
 Working Capital Turnover Ratio
 Profitability Ratios
 Profitability Ratios Formula
 Common Size Income Statement
 Vertical Analysis of Income Statement
 Profit Margin
 Gross Profit Margin Formula
 Gross Profit Percentage
 Operating Profit Margin Formula
 EBIT Margin Formula
 Operating Income Formula
 Net Profit Margin Formula
 EBIDTA Margin
 Degree of Operating Leverage Formula (DOL)
 NOPAT Formula
 OIBDA
 Earnings Per Share
 Basic EPS
 Diluted EPS
 Basic EPS vs Diluted EPS
 Return on Equity (ROE)
 Return on Capital Employed (ROCE)
 Return on Invested Capital (ROIC)
 Return on Sales
 ROIC Formula (Return on Invested Capital)
 Return on Investment Formula (ROI)
 ROIC vs ROCE
 ROE vs ROA
 CFROI
 Cash on Cash Return
 Return on Total Assets (ROA)
 Return on Average Capital Employed
 Capital employed Employed
 Return on Average Assets (ROAA)
 Return on Average Equity (ROAE)
 Return on Assets Formula
 Return on Equity Formula
 DuPont Formula
 Net Interest Margin Formula
 Earnings Per Share Formula
 Diluted EPS Formula
 Contribution Margin Formula
 Unit Contribution Margin
 Revenue Per Employee Ratio
 Operating Leverage
 EBIT vs EBITDA
 EBITDAR
 Capital Gains Yield
 Tax Equivalent Yield
 LTM Revenue
 Operating Expense Ratio Formula
 Overhead Ratio Formula
 Variable Costing Formula
 Capitalization Rate
 Cap Rate Formula
 Comparative Income Statement
 Capacity Utilization Rate Formula
 Total Expense Ratio Formula
 Markup Percentage Formula
 Efficiency Ratios
 Dividend Ratios
 Debt Ratios
 Debt to Equity Ratio
 Debt Coverage Ratio
 Debt Ratio
 Debt to Asset Ratio Formula
 Coverage Ratio
 Coverage Ratio Formula
 Debt to Income Ratio Formula (DTI)
 Capital Gearing Ratio
 Capitalization Ratio
 Overcapitalization
 Interest Coverage Ratio
 Times Interest Earned Ratio
 Debt Service Coverage Ratio (DSCR)
 DSCR Formula (Debt service coverage ratio)
 Financial Leverage Ratio
 Financial Leverage Formula
 Degree of Financial Leverage Formula
 Net Debt Formula
 Leverage Ratios
 Leverage Ratios Formula
 Operating Leverage vs Financial Leverage
 Current Yield
 Debt Yield Ratio
 Solvency Ratio Formula
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Capital Gains Yield Formula: What is the formula?
We use capital gains yield formula when we want to know how much return we will get only on the basis of the appreciation or depreciation of a stock.
Here’s the formula for capital gains yield –
Here, P_{0 }= price of the stock when we invested into it, and P_{1 }= price of the stock after the first period.
Capital Gains Yield Formula Example
Let’s take a practical example to illustrate how we can do the Capital Gains Yield Calculation.
Ishita wants to see how much she has earned on a particular stock only on the basis of capital appreciation/depreciation. She has seen that when she has bought the stock, the price was $105. Now, after 2 years, the price of the stock has appreciated to $120 per share. What is the Capital Yield on that particular stock?
We can see that we have all the information Capital Gains Yield Calculation.
All we need to do is to put in the data into the formula for capital gains yield.
 Capital Gains formula = (P_{1 }– P_{0}) / P_{0}
 Or, Capital Gains = ($120 – $105) / $105
 Or, Capital Gains = $15 / $105 = 1/7 = 14.29%.
That means, by using the this formula, we understand that Ishita got a 14.29% capital gains after 2 years of investment.
If the company offers dividend, we can also calculate the dividend yield and find out the total return on investments.
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Explanation of Capital Gains Yield Formula
Capital gains yield formula is used to find out whether the investors would get any return on the stock price. The formula for Capital gains yield uses the rate of change formula which is always used to find out the return on investments.
In this case, we will look at the beginning stock price and the stock price at the ending of first period. And then we will compare these two stock prices and find out the differences. Then we will find out the percentage of the differences on the basis of the beginning stock price.
Capital gains yield formula can also be crafted as –
We can derive this formula from the first formula only.
The first formula for Capital Gains Yield is –
 Or, Capital Gains formula = P_{1 }/ P_{0 }– P_{0 }/ P_{0}
 Or, Capital Gains formula = (P_{1 }/ P_{0}) – 1
Use of Capital Gains Yield
For every investor, capital gains is an important measure.
Many companies don’t pay dividends. In that case, the investors can only get the capital gain yield as the return on investments.
Since capital gain yield can be positive as well as negative, it affects the total returns the investors get.
For example, if Mr A gets a total return of 25% on the stock, it can be the result of a negative capital yield of – 5% and a dividend yield of 30%.
So, here’s what we consider while calculating the total returns –
 Capital gain yield
 Dividend yield
We already know the capital gains yield calculation.
To calculate the dividend yield, we need to use the following formula –
Capital Gains Yield Calculator
You can use the following Capital Gains Yield Calculator
P_{1}  
P_{0}  
Capital Gains Yield Formula=  
Capital Gains Yield Formula= 


Capital Gains Yield in Excel (with Excel Template)
Let us now do the same example above in Excel.
This is very simple. All you need to do is to put in the data into the formula.
You can easily do the Capital Gains Yield Calculation in the template provided.
Capital Gains Yield Formula Video
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