Kokonaistuotto1n

Kokonaistuotto1n is a notation used in some Finnish financial reporting and modelling to denote the total return of an investment over a horizon of n periods. The term combines kokonaistuotto, meaning total return, with a subscript or suffix that indicates the length of the horizon, here represented by 1n, i.e., the first n periods in a given analysis.

Definition and calculation: Kokonaistuotto1n encompasses both income receipts (such as dividends or interest) and changes in asset value over the specified horizon, net of costs. A common calculation is: Kokonaistuotto1n = (Vt+n − Vt) + ∑i=1 to n CFi − Fees, where Vt is the asset value at the start, Vt+n is the value at the end of the horizon, CFi are cash flows received during the periods, and Fees are any costs incurred. If expressed as a percentage of the initial investment, Kokonaistuotto1n% = {[(Vt+n − Vt) + ∑i CFi − Fees] / Vt} × 100.

Relation to other measures: Kokonaistuotto1n is related to other return metrics such as total return, time-weighted return, and money-weighted return, but its interpretation depends on the chosen horizon n and whether cash flows are treated as inflows to the investor. It is commonly contrasted with longer or shorter horizons (e.g., kokonaistuotto1m for a one-month horizon).

Example: Suppose an initial investment of 1,000 units yields a value of 1,100 after n periods, receipts total 40, and fees are 5. Kokonaistuotto1n = (1,100 − 1,000) + 40 − 5 = 135, or 13.5% of the initial investment.

Limitations and usage: The metric relies on accurate valuation and cash-flow data and is sensitive to horizon length and reinvestment assumptions. It is not a universal standard but a contextual tool used in Finnish financial analysis for performance reporting and modelling.