When a company calculates its earnings over a certain period of time, it divides its profits by the number of outstanding shares.

How to calculate the weighted average trade price If you didn't buy the same number of shares in each trade, then you need to calculate the weighted average trade price.

Dollar-weighted returns are a bit more complicated to calculate, but they give a better picture of how hard your money actually worked for you. That's critical in assessing your investment success.

Learn how time-weighted rate of return works and how to use it for your portfolio.

To do this, we need to calculate a weighted average of the company's outstanding shares over the time period. What is a weighted average?