Average Purchase Price Calculator

APP Formula:

\[ APP = \frac{\sum (Cost_i \times Shares_i)}{\sum Shares_i} \]

Average Purchase Price (APP):

Unit Converter ▲

Unit Converter ▼

From:	To:

1. What is Average Purchase Price (APP)?

The Average Purchase Price (APP) is a financial metric that calculates the weighted average cost per share when multiple purchases of the same asset are made at different prices. It helps investors track their cost basis and evaluate investment performance.

2. How Does the Calculator Work?

The calculator uses the APP formula:

\[ APP = \frac{\sum (Cost_i \times Shares_i)}{\sum Shares_i} \]

Where:

\( APP \) — Average Purchase Price (currency/share)
\( Cost_i \) — Purchase price for transaction i (currency)
\( Shares_i \) — Number of shares purchased in transaction i (count)
\( \sum \) — Summation across all purchases

Explanation: The formula calculates a weighted average where each purchase's contribution is proportional to the number of shares bought at that price.

3. Importance of APP Calculation

Details: Knowing your average purchase price is essential for determining breakeven points, calculating capital gains/losses for tax purposes, and making informed decisions about when to buy more shares or sell existing positions.

4. Using the Calculator

Tips: Enter the number of purchases first, then fill in the cost per share and number of shares for each transaction. All cost values must be positive numbers and share counts must be positive integers.

5. Frequently Asked Questions (FAQ)

Q1: Why is APP different from simple average?
A: APP is a weighted average that accounts for the number of shares purchased at each price, giving more weight to larger purchases.

Q2: How does APP help with investment decisions?
A: It helps determine your true cost basis, which is crucial for calculating profits/losses and making decisions about when to buy more or sell.

Q3: Should I include fees in the cost calculation?
A: For accurate cost basis tracking, yes. Include brokerage fees and other transaction costs in your purchase price.

Q4: What if I sell some shares?
A: When you sell shares, you'll need to track which shares were sold (FIFO, LIFO, or specific identification) to maintain accurate APP for remaining shares.

Q5: Can APP be used for other assets besides stocks?
A: Yes, the same principle applies to any asset purchased in multiple transactions, including cryptocurrencies, mutual funds, and real estate investment trusts.