IRR – Why The Difference Matters Basis. , = IRR ($ C $ 6: $ F $ 6, C12)), there are two IRRs. And it does not matter what the periods are so long as they are evenly spaced. CNBCTV18 is India's leading financial, economic and business information source. In this case the cash flows do affect the calculations. IRR, you should always use XIRR unless you explicitly want to calculate the IRR over a yearly period. 70%, like IRR. In 2023 you sold the stock for Rs 1,000. IRR vs CAGR: IRR and CAGR will be different when. Union Bank offers a nominal interest rate of 12% on its certificate of deposit to Mr. If you’re a real estate analyst or you’ve done a good amount of real estate financial modeling or real estate financial analysis, you know that the internal rate of return, or IRR, calculation, is an extremely important return metric in real estate financial modeling. It is calculated by finding the rate of return that will set. Use this calculator to calculate the internal rate of return (IRR) and measure the profitability of an investment. You can see when we try to find out the internal rate of return in cells using the XIRR function in cell D13, it gives a value of 179%. IRR - What's the Difference? — Top Shelf® Models REQUEST A FREE DEMO XIRR vs. XIRR is a powerful financial metric allowing investors and analysts to evaluate investments and projects with irregular cash flows. While CAGR simply uses the beginning and ending value, IRR considers multiple cash flows and periods—reflecting. It is commonly used to analyse the financial performance of an investment. IRR is the periodic rate of return - IRR uses 30/360 day count convention. It doesn't have external dependencies and works faster than any existing implementation. So, when it comes to XIRR vs. On this page is an Irregular Internal Rate of Return calculator, usually known as an XIRR calculator. CAGR smooths out any fluctuation, in returns, that might have occurred within each period and provides the annualized rate of return of an investment. Let us look at some of the key differences in IRR vs XIRR. In this case, we consider XIRR returns. the Gross Return in percentages. In contrast to IRR, MIRR assumes that cash flows from a project are reinvested at the firm’s cost of capital (rate of return on a portfolio company’s existing securities). Syntax of the XIRR FormulaTo learn more, see our guide comparing XIRR vs IRR in Excel. redemptions shall be marked positive. MIRR is much more precise than IRR. XIRR allows you to assign a date to each individual cash flow. You also need to convert your hurdle rate into monthly or quarterly increments (depending upon your model) to use as the "rate" in both the FV and NPV formula and. The second function we are going to discuss here is the XIRR function. XIRR is the annual effective yield - XIRR uses Actual/365 day count convention XIRR is itself not a rate of return, it is simply an effective yield The rate of return may be found by using NOMINAL function around XIRR function. Learn how to use XIRR and IRR, two Excel functions that calculate the rate of return of any investment or project. The XIRR formula is much more flexible and is based on the dates of the cash flows for the project. Vedant, the average annual return he got was 8. Hax to Save Tax: 💸DEMAT Zerodha:. You are comparing apples with oranges. 93%The calculation will go as follows: (1 + . This measurement of return is the simplest and it does not consider the time period. Does calculating an IRR monthly vs yearly make a difference? What about the question of whether to use the beginning or end of period? This article and video use the XIRR (and XNPV) process introduced by Microsoft Excel in 1997 to show why monthly calculation is important, and using the XIRR (and XNPV) means the question of beginning or end of. IRR vs XIRR – Key Differences. The conventional formula is the NPV formula which we describe at the start of the article. Enter a series of dates where cash flows move in or out of an investment plus the amounts, and the tool will tell you the annualized rate of return. With regular IRR, it assumes all cash flows occur on Dec 31, but with XIRR, we can tell Excel that the first cash flow is in the middle of the year. This function is more suitable for. In the following dataset, you can see that the cash flow is month based instead of year based. 22%. What Type of Return to Calculate? Depending on the type of investment, different types of returns are of applicable, including absolute return, relative return,. In this program you can learn all about. IRRs can be fabricated. For example, if a project has quarterly cash flows, a normal IRR changes if the flows are compounded monthly versus quarterly, but an XIRR does not. CAGR of 2. When the return is negative, the XIRR function returns zero. Aside from uneven periods, XIRR reports an effective discount rate rather than a nominal rate. Calculation of IRR (Internal rate of return) in case of consistent cash flows. 96% for five years, amounting to Rs. The tripled investment after 5 years translates to an IRR of 24. XIRR is an Excel function that allows you to assign specific dates in each periodic cash flow, which in turn makes the internal rate of return calculation more accurate. But this is not your case, because your payments are performed about weekly. , the XIRR. The internal rate of return (IRR) is determined using the “XIRR” function in Excel, which comprises two arrays: Cash Flow → The cash flow array is the net differential between the cash “inflows” and cash “outflows” in each period. The most important distinction between CAGR and IRR is that. Whereas the 7. Both these function return the annual rate of return, so there is no surprise that weekly payments. The Excel formulas, =IRR and =XIRR, are designed to calculate the IRR under different scenarios. a. Public fund managers do not control their funds’ cash flows, and TWR does not account for the timing of these flows. Absolute returns do not take into account the amount of money you invested or the time period in which you made the investment. IRR Excel Function. XIRR is a formula that enables you to calculate your money-weighted rate of return. IRR. Xirr Vs Irr. Credit Cards — Interest charged on the late payment or non-payment of credit card due, is calculated using the compound interest. The point is, the notion of a CAGR cannot be used when returns fluctuate and when periodic investments are made. will return an annual compounding interest rate, while the Yield will. It is calculated by the Internal Rate of Return (IRR) for a collection of money. Before accepting and implementing a certain investment project, its internal rate of return (IRR) should be equal to or greater than the hurdle rate. Both are computed in the same manner, and there is an assumption that the cash in flow from the various projects is utilized thereafter. 3. So, when it comes to XIRR vs. 12 courses. In this example, the TWRR would be the same 4. XIRR vs IRR XIRR vs IRR Zašto koristiti XIRR vs IRR. With regular IRR, it assumes all cash flows occur on Dec 31, but with XIRR, we can tell Excel that the first cash flow is in the middle of the year. CAGR calculates the rate of return based only on the beginning and ending investment value. The net present value of monthly loan repayments at the IRR is the same as the Loan amount. Internal Rate of Return - IRR: Internal Rate of Return (IRR) is a metric used in capital budgeting to estimate the profitability of potential investments. 76%. Learn how to calculate the internal rate of return (IRR) and the extended internal rate of return (XIRR) in Excel with formulas, examples and. 5%. The point is: we want to consider each month to be an equal number of days. If you have a monthly model, (1+IRR ())^12-1 is the more accurate function. It is done by assigning unique dates to every character's money flow. Let us look at some of the key differences in IRR vs XIRR. e. The calculation of NPV is made in absolute terms as compared to IRR which is computed in percentage terms. IRR vs XIRR – Excel Template. IRR measures the performance of private fund managers. XIRR vs. Value Dim DateArray () As Variant. Here is a quick CAGR vs XIRR comparison table that highlights the differences: CAGR. for the first 10 years and 12 percent for the last 10 years. Cash flows include investment and net income values. For example, if you are adding a varying amount to an investment on an every-month basis, you would use IRR to calculate the. XIRR is used to calculate the average cash flow for multiple and irregular transactions in a given period. t = time period. Typically, the higher the IRR, the more profitable an investment will be. How to calculate IRR in Excel with formulas. XIRR is commonly used when evaluating mutual funds with irregular cash flows. 00 dollar payment should be compounded at the quarterly rate until the bond is repaid on 1/1/11. This is because. XIRR vs IRR; See all valuation resources; Share this. Basic Return = (EV – BV) / BV. The only problem is that it doesn't work. 05) In this case, the net present value is about $190. Note: Cash flows are specified as negative, positive, or zero values. Here, taking the same example we can see Investment is made at irregular intervals. On the other hand, if the second parameter is used (i. Calculates the returns of constant investments. To learn more about XIRR vs IRR we have created a similar guide, which we highly recommend you check out to further solidify the concept. XIRR () function, on the other hand, knows the exact dates of your payments. The basic concept of deriving IRR is simple. Return on equity, abbreviated as ROE, and internal rate of return, or IRR, are both figures that describe returns that can impact a shareholder's investment. Obama, a bank client. If there are no flows to a portfolio, then you simply take the Ending Value (EV) and subtract the Beginning Value (BV) to get the gain (or loss), and then divide by that starting value. e. But as I noted previously, unfortunately, some people -- even knowledgeable people -- are sloppy with those terms. It analyzes a series of cash flows at different time intervals, considers the final value, and generates the XIRR ratio, which represents a rate of return on an investment. To convert an effective interest rate to a nominal interest rate, use the following equation: i = n((1+r. Secondly, I want to create a general formula that will work on any one of the 50 deals in the source data. IRR, or the internal rate of return, is defined as the discount rate at which the net present value of a set of cash flows (ie, the initial investment, expressed negatively, and the returns, expressed positively) equals zero. Internal Rate of Return (IRR) Internal Rate of Return is the rate that calculates the profitability for the investor. XIRR is the most accurate when you have known dates, which generally isn't until the investment is. Annual Percentage Rate (APR) is the lender's IRR for a mortgage. The Excel XIRR function is a financial function that returns the Internal Rate of Return for a series of cash flows that occur at regular or irregular interv. The XIRR formula is the modification of IRR (Internal Rate of Return) and factors irregular periods. Most striking, the company’s highest-rated projects—showing IRRs of 800, 150, and 130 percent—dropped to just 15, 23, and 22 percent, respectively, once a realistic reinvestment rate was considered (Exhibit 2). In other words, it is the actual return on your investment. And the OP used count basis=0 with YIELD,. IRR vs XIRR vs MIRR. There are no dates behind it. 7 lakh, the CAGR would be calculated as follows: CAGR = [ (7,00,000/5,00,000)^⅕] – 1 = 6. It considers time value of money. I thought about attempting to pivot the dates, values on the asset ID using power query to look like this. 93% based on compound quartely payments = (1+5. XIRR vs. dates – a range of dates corresponding to values. Mark, all-cash outflows like investments, purchases negative. 91% and the XIRR function is returning 0%. . 56%. Manager A made $100 in the first year and lost $1000 in the second year for a net loss of $900. XIRR should be the go-to metric rather than IRR. The similarities between internal rate of return and rate of interest are stated below −. Under XIRR, daily. The basic rate of return takes the gain for the portfolio and divides by the (original) investment amount. Unrealized IRR is the same as Realized IRR, but assumes that you receive, on the date of calculation, cash equal to the current value of your remaining investment. At the same time, both methods offer. The table below shows the monthly rolling returns for 1-month, 3-months and 5-months for Mutual Fund (Growth) for a 13-month period starting from 1 Jan 2015 to 1 Jan 2016. Next, press Enter. You can choose to enter yearly cash flows or simply calculate based upon a multiple. IRR is the rate of return at which NPV is zero or actual return of an. Both the numpy and Excel values for r satisfy NPV (r) = 0, where NPV is the net present value. A series of cash flows that corresponds to a schedule of payments in dates. The XIRR function. We have. Learn advanced analytics and modeling concepts in Excel. Enter the corresponding dates in the next column, under the heading “Dates. What is the XIRR Function? The XIRR Function is categorized under Excel financial functions. - See how to set up. As you can see, XIRR returns 0% whereas IRR returns (the correct) 3. Listen to this post if you prefer As a follow-on to last week’s post on NPV, we note here that there is also a fundamental difference between solving for the IRR when cash flows are measured in annual increments vs. In the present case, CAGR = 13. XIRR vs IRR. Because of this, it is account-specific. Obviously, one discount rate may generate lower NPV than the. With regular IRR, it assumes all cash flows occur on Dec 31, but with XIRR, we can tell Excel that the first cash flow is in the middle of the year. Profits generated by the project are reinvested at the internal rate of return. XIRR and IRR both calculate the internal rate of return from the investment's cash flows; the only difference is that the latter can only calculate the IRR for periodic cash flows. IRR vs XIRR – Key Differences. IRR accounts for the timing and magnitude of fund cash flows. To get the answer, you need to calculate the CAGR for 60 months on first installment, for 59 months on the second installment, for 58 months on the third one and so on and so forth. The relationship is approximate because the number of days in each quarter varies. Now, we would simply apply the IRR function to calculate the CAGR, as shown below: The CAGR we get is: Let’s do reverse engineering to check if the resulting value is correct or not. The main difference between Excel XIRR and IRR functions is this: IRR assumes that all the periods in a series of cash flows are equal. Steps: Generate a dataset for a similar case discussed above, just with a different set of values. 8y. It takes into account money earned by the investment (interest, dividends, capital gains distributions) as well as changes in. , compound interest) *QUARTERLY* rate, but XIRR *ALWAYS* returns an. I've got a bit of time so, here it is - complete C# code for XIRR calculation:There are five: NPV function, XNPV function, IRR function, XIRR function, and MIRR function. Values can be a reference to a range of. The guessed number for the expected internal rate of return (optional argument). read more. IRR is used for private fund managers because they typically exercise a degree of control over the amount and timing of fund cash flows. See examples, formulas, and tips for business accounting. EDIT. In our example, that comes out to be 10%. You see this most often on car loans. Credit Cards — Interest charged on the late payment or non-payment of credit card due, is calculated using the compound interest. NPV is a number and all the others are rate of returns in percentage. Also "XIRR" returns approx 72% which is what I Get by using a periodic formula against each Cash Flow. CAGR= (1,51,000/1,00,000)^⅕ – 1. NPV - Commercial Real EstateTrying to figure out the difference between the IRR vs NPV in real estate investing? In this video, we’ll talk about the. or if I changed 31/12/23 payment from -300,000 to -400,000. Formula Annual TWR Formula Given Four Quarterly Returns: [(1+R 1)(1+R 2)(1+R 3)(1+R 4)] – 1 [guess] (optional argument) – This is an initial guess – or estimate – of what the IRR will be. While I could just look at the XIRR of each individual investment, the size of those investments may differ substantially (e. You use this function to find the internal rate of return for periodic cash. You create various timing buckets, in this case years. Often, it indicates that something is wrong with the parameters. There are two reasons why the IRR is not a reliable yardstick: 1. Once ready, press "Calculate" and our Internal Rate of Return calculator will output: the Internal Rate of Return, a. The calculation of IRR makes use of the time period of the investment and the cash flows over that time period. And it does not matter what the periods are so long as they are evenly spaced. With IRR(), all cash flows are discounted using an integer number of compounding periods. If the NPV of an investment is zero it doesn’t. A free video tutorial from Symon He. However, we know in business that this is not always true. I am saying that, in my mind, the question doesn't make much sense at all, for the reasons I outlined above. Unfortunately, these investment decisions. Special thanks to Globaliconnect. The IRR shows a completely different and incorrect evaluation of the two managers. Jumping to the last row in the example above: What’s going on with the Excel IRR calculation of a 6. Common adjustments include:The XIRR function compounds DAILY and returns an Effective rate of return. 10%. The difference between using the XIRR and IRR Excel function is as follows. Financial caution This is a simple online calculator which is a good starting point in estimating the extended internal rate of return from an investment with non-period cash flows, it is by no means the end of such a process. IRR Excel Function: What is the Difference? The difference between using the XIRR and IRR Excel function is as follows. example, and the bond has less than a year to go, the yield will be. A cheat sheet for when to use which, and the rationale behind each annualized return measure. The investment must have a negative sign, as it is a cost. Reinvestment rate. IRR (internal rate of return) is the rate at which the net present value of an investment becomes zero. 5%, while the new machine purchase would. Example of XIRR vs IRR calculation. To calculate the IRR value, we can also use MIRR and XIRR functions and also use the conventional formula. Differences Between The Two Formulas. CAGR represents the smooth average annual growth rate of an investment, assuming that it has grown at a steady rate over the specified period. Note: For greater precision, CFI recommends you use the XIRR function. Overview of IRR vs. Figure 3. differences. Second, XIRR returns a compounded rate. XIRR stands for Extended Internal Rate of Return, a method used to calculate returns on investments. CAGR vs Absolute Returns in Stock Price Let’s say you had invested in stock X in 2015 for Rs 500. This way you can calculate IRR using the IRR function for monthly cash flow in Excel. The XIRR() function permits payments to. Convert a monthly IRR to annualized IRR with the following equation, with “r” representing the monthly IRR: annualized IRR = (1 +. The Excel IRR function returns the internal rate of return for a series of periodic cash flows represented by positive and negative numbers. NPV = 200 ÷ (1 + 0. For example, if you pay insurance premium for 12 months and receive some cash back in the 13 th month, you could calculate the monthly IRR and then convert to a CAGR (compounded annual growth rate) XIRR: If the cash flow. Aggregate CAGR of multiple mutual fund investments made within a period. This uses the "FV" formula combined with the "NPV" or "XNPV" formula to automate a cash flow plug for a targeted IRR or XIRR return. 5 out of 5 4. Like CAGR, internal rate of return, or IRR, is a metric used by commercial real estate investors to calculate the profitability of an investment. 111. PPS: The small difference between the IRR and XIRR results for this example is due to the fact that 31-Jul-14 is 737 days before 6-Aug-16 instead of 730 days (2*365). 2% but the IRR would have dropped to 3. a bigger numerator must be divided by a bigger denominator, and hence IRR, given the. You then apply the XIRR formula to calculate SIP returns. Unlike, under MIRR, cash flows apart from initial cash flows are reinvested at firm’s rate of return. XIRR vs CAGR. 907% over the one year. The fact is IRR figures don’t inform investors about the two points above. 3. Under XIRR, daily compounding is assumed, and the effective annual rate is returned. ”. Throughout the life of a fund, managers themselves determine rates of return. CAGR = (Final Investment Value/Initial Investment Value)^1/n – 1. Použití funkce jednoduché = IRR v aplikaci Excel může být zavádějící, protože předpokládá, že všechna časová období v řadě peněžních toků jsou stejná. Just comparing Excel IRR (implemented by MSFT) and XIRR, we can infer that there are differences in the implementation. XIRR vs. Differences Between The Two Formulas. If I change certain cashflows values I can get the values to align. Calculation of IRR (Internal rate of return) in case of consistent cash flows. As real-world investments often involve irregular cash flows, XIRR is a more versatile and realistic metric. The first value is negative, since it represents an outflow. 00%. IRR (values, [guess]) The IRR function syntax has the following arguments: Values Required. The XIRR function calculates the internal rate of return for a series of cash flows that occur at irregular intervals. Also The first Value must be a Negative value. Hi @v-ljerr-msft,. In Mr Vedant’s case, this is how it gets calculated. Solving the below equation can help us to calculate the XIRR return. Now your formula becomes =IRR (myrange). . 08% return? The Excel IRR formula assumes equal cash flows at regular intervals by factoring in a midpoint assumption. If you know anything about getting IRR working in a financial model, it’s that you’re far better off gravitating towards the XIRR formula. XIRR is that single rate of return, which would give the current value of the investment when applied to every installment (and redemptions if any). Next, input the following formula to calculate the 1 + Return value. =IRR. Next would be to Create an XIRR column on the Pivoted tables. The overall IRR. Context. IRR is used to measure the estimated cash flows of investments against a benchmark. Step 3: Compare the IRR with the Discount Rate. In other words, it’s the rate that will make the present value of the future cash flows equal to the initial dollar investment (sometimes called the “break-even discount rate”). 3% from year 0. for the last 10 years. XIRR vs. $endgroup$ –Your basic question was why the apparent difference between your irr of . If you are in the commercial real estate business, understanding the difference between XIRR vs IRR is vital. The Internal Rate of Return (“IRR”) is the rate (“r”) at which the Net Present Value (“NPV”) of all future cash inflows and outflows (“CF”) for a project is zero. 7 lakh at the end of your investment. If you have invested a lump-sum in a single product or stock and want to calculate the growth rate after, say, 2 years or 5 years, or 7. Like the IRR function, the XIRR function stands for the Extended Internal Rate of Return. The internal rate of return is the discount rate that makes the net present value equal to zero. XIRR vs. Learn more about: XIRR. IRR Excel Function: What is the Difference? The XIRR function in Excel is more practical than the IRR function due to the increased flexibility of not being restricted to. Key Takeaways. all this is saying is that you doubled your money. Here's a XIRR vs IRR spreadsheet to play with. IRR: IRR or internal rate of return is a function in Excel used to calculate the return for any periodic cash flow entries. Select Financial function. TWR is used by the investment industry to measure the performance of funds investing in publicly traded securities. Stock XIRR Calculation: Stock split. Please feel free to comment and tell us what projects/investments, you use IRR and XIRR for. XIRR in mutual funds. 7%. MIRR is a modification of the IRR calculation and is a more accurate reflection of the true rate of return for a series of cash flows. 25%, which is a significant difference from the result using the IRR function. 0 = NPV Σ CF n ÷ (1 + IRR)^ n; XIRR vs. Guess. XIRR is an Excel function name that finds IRR for non-periodic cash flows, as such there is no term called XIRR When calculating IRR you may come across a number of different cases such as 1) Cash flows are all of equal lengths. Note that if you have other cashflows in and out, it gets a bit more complicated (e. The top-ranked project based on IRR dropped to the tenth-most-attractive project. To compute the MIRR, the Excel function uses the following parameters: The values. . XIRR (values, dates, [guess]) The XIRR function syntax has the following arguments: Values Required. XIRR is an Internal Rate of Return (IRR) for mutual funds. I understand XIRR handles irregular cash flows while IRR assumes periodic cash flows, but why would XIRR return 10. IRR is what a lender would actually make on a loan, and is often applied as a standard, annualized way to compare investment returns. The relevant code is: Dim CFArray () As Variant CFArray = Range ("Q22:Q24"). Suppose you have 2 options, invest 10,000 in fund A and get ₹ 50,000 return or invest in fund B and get a 1,00,000 return. To calculate IRR, the GP must estimate a fund’s cash flows. It assumes that positive cash flows are reinvested based on the cost of the capital of the firm. 227%. Fundamentals of Analyzing Real Estate InvestmentsLearn professional investment analysis techniques for real estate investing in residential and commercial propertiesRating: 4. XIRR. 7%. XIRR vs IRR. Explanation: a net present value of 0 indicates that the project generates a rate of return. 10%. It compares and selects the. Author | Investor | MBA. Second, you assume another discount rate and calculate the Net Present Value (NPV) using that supposed discount rate. All dates must be in. My thoughts are, you need to use the finction "XIRR" because you do not have consistently date periods. This could be the case when an investor makes additional investments or withdrawals at different points. Here, taking the same example we can see Investment is made at irregular intervals. ROI indicates total growth, start to finish, of an investment. IRR is the time period for which they are used for calculating the performance of investments. But Excel XIRR assumes 365 days per year. Description Returns the internal rate of return for a schedule of cash flows that is not necessarily periodic. The internal rate of return (IRR) serves as another earnings prediction model. Mutual fund companies use internal rates of return to estimate the performance of a mutual fund over a given period. 5 years, CAGR will. One of the key differences between ROI vs. While CAGR is easier to calculate, IRR can cope with more complicated situations. For example, if you have monthly cash flows on the first of Jan, Feb,. The XIRR meaning is the returns earned by you over a period of time, and amount of all cash inflows/outflows, including dividends, capital gains, etc. You can easily use the XIRR function in Excel to calculate. 5% figure I provided is a nominal interest rate. 48. IRR is the periodic rate of return - IRR uses 30/360 day count convention. t = time. The main difference between the NPV and the XNPV functions is that the values input in the NPV function are equally spaced in terms of time period, whereas the values input in the XNPV function are. It is bit complex to calculate. As a check, given i = IRR and x = XIRR, I would expect that (approximately): x ≈ (1+i)^4-1 i. compounded annually) which provides a mechanism for reliable comparison of interest rates. It offers higher flexibility as it intakes entries at a specific date. 5% is considered good. As we have said before, the IRR function calculates the Internal Rate of Return without considering external factors like Cash Flows and Discount rates. However, we can still check using the IRR formula, which gives us an overall return of 10%. The XIRR formula is much more flexible and is based on the dates of the cash flows for the project. Whereas, ROI gives the overall picture of the investment and its returns from beginning to end. XIRR stands for Extended Internal Rate of Return is a method used to calculate returns on investments where there are multiple transactions happening at different times. ( =XIRR (Values, Dates, [guess])) Step 5: After writing =XIRR, select all values or transactions, add a comma, select all dates, and click on enter. The 2020 GIPS® standards allows firms to use any money-weighted method; this is a change from prior versions, where only the IRR can be used. Any potential investments must possess a return rate that is higher than the hurdle rate in order for it to be acceptable in the long run. In this video I explain why your XIRR and IRR values come out differently when you are applying them in the same financial model. Although both formulas are used to measure the rate of return on an investment, there are some notable differences between them. XIRR vs IRR; Financial caution Using the XIRR calculator. 36. Unlike the CoC return, however, IRR accounts for the time that an investor’s funds are tied up in a project. So. Let's say you invested Rs 3,000 in a mutual fund through an SIP with a starting date of 1st January 2022 and an end date of. The differences in the XIRR results are due to the dates entered in the Excel XIRR formula. Simply. The difference between IRR and XIRR is IRR measures rate of return on uneven cash flows made at regular intervals, whereas XIRR measures the return on even or uneven cash flows made at irregular intervals. The IRR, also commonly referred to as the dollar weighted return, is the measurement of a portfolio’s actual performance between two dates, including the effects from all cash inflows and outflows.