I'd like to make sure that I'm properly calculating the return on a holding when dividends are reinvested. Many portfolio management apps/spreadsheets don't allow for the purchase of additional shares from the dividends received and instead assume that these additional shares are funded by an additional input of cash, and so I'm building a spreadsheet.

Imagine that I purchased 550 shares in ABC Plc in May 2015, and then a further 500 shares in January 2016.  All dividends were reinvested.

I've categorised the purchases into those funded by Cash, and those funded by dividend reinvestment (DRIP). 

The total return is calculated as:

((Current Value of Shares + Dividends Received - Cost of Reinvestment) - Original Cash Investment) / Original Cash Investment

Here's a link to the spreadsheet: Dropbox link

I am assuming that I could apply this across a complete portfolio by consolidating the values for each holding in to the formula.

Have I got this right?

Thanks

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