Skip to main content

Compute cost basis of stocks with LIFO method in Google Sheets

Labels:

The Last In, First Out (LIFO) method is an accounting method used to calculate the cost basis of a stock portfolio. It is the opposite of the First In, First Out (FIFO) method, where the oldest shares are sold first. In the LIFO method, the most recent shares are sold first.

In the previous post Compute cost basis of stocks with FIFO method in Google Sheets, I explained how to implement FIFO method in Google Sheets to compute cost basis in stocks investing.

In this post, I explain how to implement LIFO method in Google Sheets to compute cost basis in stocks investing.

LIFO function in Google Sheets for managing stock investment portfolio

Table of Contents

LIFO example

Firstly, I present an LIFO example to clarify the concept of this method and to use it later as test case for my LIFO formula.

Let's assume that I have bought and sold several time stocks of TotalEnergies SE (EPA:TTE). The table below presents my transactions for TotalEnergies stock.

Date Type Symbol Amount Shares
26/11/2021 BUY EPA:TTE -494.26 12
19/08/2021 BUY EPA:TTE -404.09 11
30/04/2021 BUY EPA:TTE -479.55 13
23/03/2021 BUY EPA:TTE -477.17 12
05/02/2021 BUY EPA:TTE -499.99 14
07/10/2020 BUY EPA:TTE -496.47 17
18/09/2020 BUY EPA:TTE -474.85 15
06/07/2020 BUY EPA:TTE -57.60 2
04/05/2020 BUY EPA:TTE -489.85 16
02/04/2020 SELL EPA:TTE 483.76 -13
24/03/2020 SELL EPA:TTE 482.51 -17
18/03/2020 BUY EPA:TTE -479.42 20
12/03/2020 BUY EPA:TTE -476.35 17
24/02/2020 BUY EPA:TTE -471.44 11
03/10/2019 BUY EPA:TTE -497.70 11
09/05/2018 SELL EPA:TTE 468.35 -9
02/02/2018 BUY EPA:TTE -421.80 9

If I apply the LIFO accounting method, the shares I bought latest will be the shares I sell first and the sold shares will not have any more impact on my current unit cost price. The table below shows the result of applying LIFO accounting method after each transaction.

Date Type Symbol Amount Shares Transaction Unit Remaining shares Cost of remaining Cost of sold Realized gain
26/11/2021 BUY EPA:TTE -494.26 12 -41.19 141 5039.11 0
19/08/2021 BUY EPA:TTE -404.09 11 -36.74 129 4544.85 0
30/04/2021 BUY EPA:TTE -479.55 13 -36.89 118 4140.76 0
23/03/2021 BUY EPA:TTE -477.17 12 -39.76 105 3661.21 0
05/02/2021 BUY EPA:TTE -499.99 14 -35.71 93 3184.04 0
07/10/2020 BUY EPA:TTE -496.47 17 -29.2 79 2684.05 0
18/09/2020 BUY EPA:TTE -474.85 15 -31.66 62 2187.58 0
06/07/2020 BUY EPA:TTE -57.6 2 -28.8 47 1712.73 0
04/05/2020 BUY EPA:TTE -489.85 16 -30.62 45 1655.13 0
02/04/2020 SELL EPA:TTE 483.76 -13 -37.21 29 1165.28 352.12 131.64
24/03/2020 SELL EPA:TTE 482.51 -17 -28.38 42 1517.4 407.51 75
18/03/2020 BUY EPA:TTE -479.42 20 -23.97 59 1924.91 0
12/03/2020 BUY EPA:TTE -476.35 17 -28.02 39 1445.49 0
24/02/2020 BUY EPA:TTE -471.44 11 -42.86 22 969.14 0
03/10/2019 BUY EPA:TTE -497.7 11 -45.25 11 497.7 0
09/05/2018 SELL EPA:TTE 468.35 -9 -52.04 0 0 421.8 46.55
02/02/2018 BUY EPA:TTE -421.8 9 -46.87 9 421.8 0

On the 02/02/2018, I bought 9 shares of TotalEnergies SE (EPA:TTE) then sold them all on 09/05/2018. After these 2 transactions, it's straightforward that I didn't own any more the stock and the cost of sold for 9 shares were exactly the amount that I bought them from the first place.

From 03/10/2019 until 18/03/2020, I bought 4 times shares of TotalEnergies SE (EPA:TTE) at 4 different prices (45.25 €; 42.86 €; 28.02 €; 23.97€). The cost of remaining after each of these transactions does not involve the first 2 transactions because they were closed up with the LIFO method. After the 4 BUY transactions, I had 59 shares at the cost of 1924.91€ that are both the sums of the 4 transactions.

On the 24/03/2020, I sold a 17 shares of TotalEnergies SE (EPA:TTE) but at how much cost? By applying the LIFO method, those 17 shares all belong to the to the BUY transaction on the 18/03/2019, therefore, it costs me 479.42 / 20 * 17 = 407.51€. After this sale, I still had 59 - 17 = 42 shares, of which:

  • 3 shares were bought on 18/03/2020 for total of 479.42 / 20 * 3 = 71.913€
  • 17 shares were bought on 12/03/2020 for total of 476.35€
  • 11 shares were bought on 24/02/2020 for total of 471.44€
  • 11 shares were bought on 03/10/2019 for total of 497.70€
  • Totally, the 42 shares remaining costs me 1517.40€

By following the same analysis with LIFO method, I can compute all the remaining quantities, cost of remaining, cost of sold, etc. after every transaction.

How to do LIFO in Google Sheets

I write an Apps Script function named LIFO accepting 2 parameters:

  • The first one is a list of amounts of transactions ordered by time ascending.
  • The second is a list of quantities of transactions ordered by time ascending.

This LIFO functions returns:

  • The remaining quantities after the last transaction
  • The cost of remaining after the last transaction
  • The cost of goods sold for the last transaction if it is a SELL transaction

In the world of programming, when we talk about LIFO, we think of a queue. In my LIFO implementation, I use a queue to store the unit costs of shares. Each element in the queue represents a share and each share is associated with its unit cost.

I iterate every transaction from the oldest to the latest:

  • If it is a BUY transaction, I push shares to the back of the queue.
  • If it is a SELL transaction, I remove shares at the end of the queue. The sum of all removed shares is actually the cost of goods sold for this SELL transaction.

At the end of the iteration:

  • The length of the queue is actually the number of remaining shares.
  • The sum of the queue is actually the cost of remaining.

Notes

  • Google Apps Script is actually JavaScript
  • In JavaScript, we can use array to present a queue
  • In case of LIFO, to remove an element from the end of an array, we use the pop() method

How to use LIFO formula in Google Sheets

This LIFO function written in Apps Script is available for use in Google Sheets as same as any other built-in formulas.

Simple usage

Here is how I use the LIFO formula in Google Sheets for the first 2 transactions 02/02/2018 and 09/05/2018.

=LIFO({-421.8;468.35},{9;-9})

Here is how I use the LIFO formula in Google Sheets for the first 7 transactions from 02/02/2018 until 24/03/2020.

=LIFO({-421.8;468.35;-497.7;-471.44;-476.35;-479.42;482.51},{9;-9;11;11;17;20;-17})

If I have the amounts on column D and the quantities on column E, both already ordered ascending by time, I can use the LIFO formula in Google Sheets as:

=LIFO(D2:D10, E2:E10)

Use LIFO with QUERY formula

As I have a dedicated Transactions sheet for registering my transactions, I can apply the LIFO method for any stock on any specific date by combining it with the QUERY formula.

The idea is to use the QUERY formula to extract transactions by stock and by date, then sort them ascending by time.

Here is an example of using the LIFO formula with the QUERY formula in Google Sheets:

=LIFO(QUERY(Transactions!A:E,"select D where C='EPA:CS' and B!='DIVIDEND' and A <= date '2020-03-24' order by A asc",0),QUERY(Transactions!A:E,"select E where C='EPA:CS' and B!='DIVIDEND' and A <= date '2020-03-24' order by A asc",0))

Demo

Demo spreadsheet: how to implement LIFO method in Google Sheets to compute cost basis in stocks investing

Conclusion and comparison between FIFO and LIFO

In this post, I have explained how to apply LIFO(Last In, First Out) formula in Google Sheets to compute cost basis of a stock portfolio investment. The process involves writing the LIFO function with Apps Script and then use it as a normal formula in Google Sheets. The LIFO formula returns the remaining quantities, the cost of goods sold and the cost of remaining after the last transaction.

To compare the differences between FIFO and LIFO, please read also to my previous post about Compute cost basis of stocks with FIFO method in Google Sheets. The picture below shows an example of difference between these two accounting methods.

Compare LIFO and FIFO functions in Google Sheets for managing stock investment portfolio

Disclaimer

The post is only for informational purposes and not for trading purposes or financial advice.

Feedback

If you have any feedback, question, or request please:

Support this blog

If you value my work, please support me with as little as a cup of coffee! I appreciate it. Thank you!

Support AllStacksDeveloper blog a coffee if you find the contents useful!

Share with your friends

If you read it this far, I hope you have enjoyed the content of this post. If you like it, share it with your friends!

Comments

Post a Comment

Popular posts

Use SPARKLINE to create 52-week range price indicator chart for stocks in Google Sheets

Use SPARKLINE to create 52-week range price indicator chart for stocks in Google Sheets

The 52-week range price indicator chart shows the relative position of the current price compared to the 52-week low and the 52-week high price. It visualizes whether the current price is closer to the 52-week low or the 52-week high price. In this post, I explain how to create a 52-week range price indicator chart for stocks by using the SPARKLINE function and the GOOGLEFINANCE function in Google Sheets.
Compute cost basis of stocks with FIFO method in Google Sheets

Compute cost basis of stocks with FIFO method in Google Sheets

After selling a portion of my holdings in a stock, the cost basis for the remain shares of that stock in my portfolio is not simply the sum of all transactions. When selling, I need to decide which shares I want to sell. One of the most common accounting methods is FIFO (first in, first out), meaning that the shares I bought earliest will be the shares I sell first. As you might already know, I use Google Sheets extensively to manage my stock portfolio investment, but, at the moment of writing this post, I find that Google Sheets does not provide a built-in formula for FIFO. Luckily, with lots of effort, I succeeded in building my own FIFO solution in Google Sheets, and I want to share it on this blog. In this post, I explain how to implement FIFO method in Google Sheets to compute cost basis in stocks investing.
Create personal stock portfolio tracker with Google Sheets and Google Data Studio

Create personal stock portfolio tracker with Google Sheets and Google Data Studio

I have been investing in the stock market for a while. I was looking for a software tool that could help me better manage my portfolio, but, could not find one that satisfied my needs. One day, I discovered that the Google Sheets application has a built-in function called GOOGLEFINANCE which fetches current or historical prices of stocks into spreadsheets. So I thought it is totally possible to build my own personal portfolio tracker with Google Sheets. I can register my transactions in a sheet and use the pivot table, built-in functions such as GOOGLEFINANCE, and Apps Script to automate the computation for daily evolutions of my portfolio as well as the current position for each stock in my portfolio. I then drew some sort of charts within the spreadsheet to have some visual ideas of my portfolio. However, I quickly found it inconvenient to have the charts overlapped the table and to switch back and forth among sheets in the spreadsheet. That's when I came to know the existen
How to convert column index into letters with Google Apps Script

How to convert column index into letters with Google Apps Script

Although Google Sheets does not provide a ready-to-use function that takes a column index as an input and returns corresponding letters as output, we can still do the task by leveraging other built-in functions ADDRESS , REGEXEXTRACT , INDEX , SPLIT as shown in the post . However, in form of a formula, that solution is not applicable for scripting with Google Apps Script. In this post, we look at how to write a utility function with Google Apps Script that converts column index into corresponding letters.
Create a dividend income tracker with Google Sheets by simply using pivot tables

Create a dividend income tracker with Google Sheets by simply using pivot tables

As my investment strategy is to buy stocks that pay regular and stable dividends during a long-term period, I need to monitor my dividends income by stocks, by months, and by years, so that I can answer quickly and exactly the following questions: How much dividend did I receive on a given month and a given year? How much dividend did I receive for a given stock in a given year? Have a given stock's annual dividend per share kept increasing gradually over years? Have a given stock's annual dividend yield been stable over years? In this post, I explain how to create a dividend tracker for a stock investment portfolio with Google Sheets by simply using pivot tables.
GOOGLEFINANCE Best Practices

GOOGLEFINANCE Best Practices

Anyone using Google Sheets to manage stock portfolio investment must know how to use the GOOGLEFINANCE function to fetch historical prices of stocks. As I have used it extensively to manage my stock portfolio investment in Google Sheets , I have learned several best practices for using the GOOGLEFINANCE function that I would like to share in this post.
Slice array in Google Sheets

Slice array in Google Sheets

Many functions in Google Sheets return an array as the result. However, I find that there is a lack of built-in support functions in Google Sheets when working with an array. For example, the GOOGLEFINANCE function can return the historical prices of a stock as a table of two columns and the first-row being headers Date and Close. How can I ignore the headers or remove the headers from the results?
How to use WEEKDAY function to get last Friday in Google Sheets

How to use WEEKDAY function to get last Friday in Google Sheets

As I manage my stock investment portfolio in Google Sheets, I need to see its evolution over time, for example, in the last year. However, the computation for daily evolution is resource-consuming and might cause performance issues for the spreadsheet. As an alternative, I compute only the weekly evolution of the investment portfolio for the last year. For each week, I compute only the portfolio's value at the end of the Friday. For that, I need a Google Sheets formula to return the last Friday for a given date. This post explains how I do that with the WEEKDAY formula in Google Sheets.
Demo stock investment portfolio tracker with Google Sheets and Google Data Studio

Demo stock investment portfolio tracker with Google Sheets and Google Data Studio

I am happy to announce the release of LION stock portfolio tracker. It is a personal stock portfolio tracker built with Google Sheets and Google Data Studio. The stock portfolio's transactions are managed in Google Sheets and its performance is monitored interactively on a beautiful dashboard in Google Data Studio. You can try with the demo below and follow the LION stock portfolio tracker guide to create your own personal stock portfolio tracker with Google Sheets and Google Data Studio.