This article will explain each type of Metric currently available on the InvestNext platform and break down the definition and/or calculation.

**Accrued Interest**

** Definition:** The amount of accrued and unpaid interest due on a promissory note on a specific date according to its terms and any previous activity.

**Accrued Preferred Return **

** Definition: **The amount of accrued and unpaid preferred return due to a held equity position on a specific date according to the terms of the project operating agreement.

*Calculation:** *This calculation will be based on the preferred return hurdle in the most recently created distribution plan (for each class).

**Annualized Return **

*Calculation:*

*y*This calculation is made so that when a 0% return is reached, the investor has recouped the initial investment.

**Capital Balance (Capital Account)**

** Definition: **For a given equity position, the capital balance consists of the original capital contribution associated with that equity, minus any return of capital distributions made on that equity.

** Calculation:** (Original Capital Contribution - Return of Capital Distributions)

**Capital Returned**

** Definition:** This is going to be the sum of the Return of Capital distributions made over the lifetime of the investment.

**Cash-on-Cash Return**

** Definition:** Cash-on-cash return measures annual cash flow against the original contribution amount. Or put another way, it's the equity multiple divided by years elapsed.

*Calculation: *

**Cost Basis**

** Definition:** Cost basis is the original value or purchase price of an asset or investment for tax purposes.

**Deductions**

** Definition: **Deductions are going to be one-off line items from a distribution, for a specific investment, that reduces the total cash paid to the investor. The most common example that we currently see are tax withholdings.

** Calculation:** (Distribution - Deduction) = Net Distribution/Cash

**Distributions**

** Definition:** Sum of all distribution allocations to an investor, regardless of the type of distribution (e.g. return of capital, preferred return, dividends etc)

**Equity Multiple**

** Definition:** The rate of return based on the total net profit and the equity investment, also referred to as EM.

** Calculation:** Equity Multiple = (Total Distributions / Total Contributions)

**IRR (Internal Rate of Return) **

*Definition:*** **IRR is solved by setting the value of the net present value (NPV) equation to zero and solving for the rate of return. InvestNext uses an actual/actual day count convention in this calculation as opposed to Excel's XIRR function which uses actual/365.

*Calculation: *

**Lifetime Contributions**

** Definition:** Sum of all capital contributions made over the lifetime of an investment.

**Market Value**

** Definition: **The value expected to receive at a specific point in time for which the property/shares could be sold at.

** Calculation: **Market Value = (Number of Units * Current Class Price)

**Preferred Return**

Definition: A preferred return is a profit distribution preference whereby profits, either from operations, sales, or refinance, are distributed to specific classes.

Calculation: Total Preferred Return = (Investment * Preferred Return Rate)

**Profit Distributions**

** Definition:** The total amount of distributions received minus the return of capital transactions.

*Calculation:*

Profit Distributions = (Total Distributions - Return of Capital)

Distributions = (Preferred Return + Dividends)

**Realized Gain & Unrealized Gain**

** Definition: **An

**unrealized gain**is an increase in the market value of an asset that has yet to be sold for cash. It is a theoretical profit that exists on paper. A

**gain becomes realized**once the position is sold for a profit.

*Calculation:*

Realized Gain = Sold Price - Investment

Unrealized Gain = Market Value - Investment

**Redemptions**

** Definition:** Specific type of transfer transaction (not a distribution), also known as a “Transfer to Treasury Account”. The transaction will reduce the total outstanding units in a Project.

**Units**

** Definition:** A Share/Unit is a measure of ownership in a Project, determined by the total contribution amount and class price.

** Calculation:** Units = (Total Contributions / Class Price)