# How to calculate P&L for a given period of time [closed]

Let's say I have a currency trading app. I start with \$100 USD, and after 4 weeks, though trades, I now have \$200 USD. My P&L would be 100\$ or up \$100.

``````So the calc would be: P&L = start_value - current_value
``````

Now, in a similar scenario, I start the month with \$100 USD, 2 weeks later I add \$50 USD, 2 weeks later I now have \$200 USD. How do I calculate the P&L for the last four weeks, considering I added \$50 in the middle?

• Why wouldn't it be "P&L = start_value - current_value - contributions"? – RonJohn Nov 2 '17 at 15:50

You could say

``````P/L_1 = V - \$100
P/L_2 = \$200 - (v + \$50) = \$150 - V
``````

So that gives us the profit or loss for the first two weeks and then the second two weeks (`V` is the value at two weeks, when you add the \$50). But if we add those, the `V` cancels out and we get:

``````P/L = P/L_1 + P/L_2 = \$150 - \$100 = \$50
``````

So in general, we could say

``````P/L = final value - (sum of contributions)
``````

If we wanted to make things complicated, we could try to include inflation. The \$50 two weeks from now is worth less than half the \$100 now. Or the \$200 at the end is worth less than twice the \$100 now. But it can be difficult to calculate inflation for periods less than a month, as they don't usually report it more often than that. It's more something that you would do when calculating an annual number or a number for multiple years.