Formula and Example of TSR Calculation

Formula and Example of TSR Calculation

Suppose a stock has a share value at the beginning of a year of €250. At the end of the year the share is worth €295. During the year the company also pays a €5 dividend per share. The company does no stock buyback during the year.
The TSR of this company can be calculated using the following formula:

TSR formula

TSR = ( [current price - purchase price] + [dividends + any other payout like from a stock buyback] / purchase price )
So TSR = ( [€295 - €250] + [€5 + €0] / €250
or
TSR = (€45 + €5) / €250 = 0.2

Convert TSR into a Percentage

TSR is normally shown as a percentage. To get a percentage we have to convert the result of the previous formula by simply multiplying it by 100.
So then the TSR becomes: 0.2 x 100 = 20%.