How to handle stock splits and consolidations
Overview
The formula for calculating a stock split or consolidation is
Ratio = New Shares / Old Shares
For example
- On 2021-02-18 you buy 100 GME shares
- On 2022-07-21 Gamestop issued a stock split 4 to 1
- You now have 400 GME shares.
- You can type in 4 in the stock split ratio,
- However…
- The better way to do this is type the excel formula = 400/100
- It is more accurate and good practice to follow.
- Put this formula in all Buy and Sell transactions prior the stock split date of 2022-07-21
Scenario 1
Lets say there are a few buy & sell transactions before the GME stock split.
How would you handle the following transactions.
- On 2021-02-18 you buy 100 GME shares
- On 2021-03-04 you sell 25 GME shares
- You have a balance of 75 GME shares
- You can see this on column AD
- On 2022-07-21 Gamestop issued a stock split 4 to 1
- You now have 300 GME shares.
- You can type in 4 in the stock split ratio,
- However…
- The better way to do this is type the excel formula = 300/75
- It is more accurate and good practice to follow.
- Put this formula in all Buy and Sell transactions prior 2022-07-21