Distribution Adjustment Work Sheet

This worksheet shows how to compute distribution-adjusted total return between any two points.

Fund and stock prices must be adjusted for distributions (the white dots on the redline of the T Chart) to reflect an accurate picture of the fund performance over time. FastTrack computations reinvest distributions at the closing price on the x-dividend day. All historical prices from the day before the x-dividend date are reduced backward in time. When a split occurs, prices are reduced by the split ratio. For example, when 3-for-1 split occurs, prices before the x-dividend date will be multiplied by 1/3. A 1-for-5 reverse split is handled the same way:  Prices before the x-dividend date will be multiplied by 5. The worksheet below shows how to compute distribution-adjusted prices and compute a total return between any two points with intervening distributions.

See the Easy Way Below

Adjusted Price and Total Return Worksheet

       * Distribution Adjustment Example (without stock split)

       * Distribution Adjustment Example (with stock split)

1. Write down : 
   Symbol __________ from starting date ________ to last date in the database _________.
2. Display the T Chart for the ticker Symbol as the red line. Show the entire data range. Place the Dashed Pole on the "starting date". FT shows a BP= value in the performance values on the right side of the screen. This is total return from the "starting date" to the "last date". Record BP= below.
3. Without moving the pole record the CP= value in First CP= below
4. Move the Dashed Pole to the last day and record in Last CP=  below.
5. Record the Distribution Amount by moving the pole from the "to last date" to the "from staring date". Stop in each distribution (white dot) and read the information in the white box that pops up. Record the X-date and Closing Price in the table below. If there are multiple distributions on the same white dot, sum the distributions and record as a single Distribution Amount. You may have to click and hold on the white box higher and drag it higher to see all it's information. Do not sum split ratios. You may sum split values when we give a $ amount for fund splits. Record split ratios in the Split Ratio column. A 2 for 1 split would be recorded as 1/2. If there is no split on that distribution day, then record the value=1.0 under Split Ratio  . The ratio recorded will be multiplied in step #1 below.

         BP=             First CP=       Last CP =

     ____________%    $___________     $___________

1. To compute the Adjustment Factor (AdjFactor), do the following:
   
               AdjFactor = Split Ratio X ( Closing Price   /  (Closing Price + Distribution Amount) ).
   
2. When all AdjFactors have been computed, multiply them all together to get the
   
               Product of All Adjustment Factors (PofAll).___________ .
   
3. Multiply the First CP and PofAll to produce the
   
               Adjusted 1st Price( Adj1stPrice) _______________.
   
   This is the adjusted price that FastTrack uses internally for its calculations. It is also the price that FastTrack would export to MetaStock and other programs that do not record distributions. Adjusted prices are not the same as daily close, unadjusted prices which appear in the Wall Street Journal everyday and in your brokerage statements.
   
4. Do the final calculation to get the total return recorded as BP= above.
   
                 [(Last CP - Adj1stPrice ) / Adj1stPrice] x 100 = _________%. <===RESULT

If  RESULT does not match BP= as recorded above the table, then you have done something wrong. You may call FT technical support for assistance.

Summary

This exercise shows you how FastTrack gets its total return figures through a process of adjusting prices, internally, for distributions. This is an arduous process to do by hand. Choose short periods which include only one distribution and that end at the last day in the database. This will substantially reduce the number of hand calculations required.

The Easy Way to Check

You can use Excel to examine FT4Web calculations: Do the following.

1. Display the issue and period for which you want to calculate the distributions.
2. Move the pole to the last day of the chart. A summary of distributions appears on the screen.
3. Start Excel and load the file C:\FT\FT4WIN\TEMP\FTDIS.CSV . This little file is overwritten automatically each time you display a summary in step #2. It contains a spreadsheet that will do the calculations in Excel including math formulas, not just raw data.

NOTE: Excel has an optional method of cell reference called "R1C1". If you are using R1C1, then Excel will show an errors. Click the Tools menu item/options/general tab and deselect the R1C1 option. Shut down Excel, and then reload FTDIS.CSV.