The absolute return simply compares what you got back with what you put in. Any dividends, interest or payouts received are added to the final value so the total return reflects everything the investment delivered.

The annualized return converts that total gain into a per-year compounded rate, which is the only fair way to compare investments held for different lengths of time.

Given: Invested ₹200,000, final value ₹340,000, held 4 years, no dividends

Gain = 340,000 − 200,000 = ₹140,000  ·  Total return = 140,000 / 200,000 × 100 = 70%

Annualized = (340,000/200,000)^1/4 − 1 = 1.7^0.25 − 1 ≈ 14.19% p.a.

• Annualized return assumes a single lump sum; for staggered investments use an XIRR-based measure.
• Taxes, brokerage, exit loads and expense ratios are not deducted.
• Inflation is not adjusted for — the figure shown is a nominal return.
• A 70% total return over 4 years is not "17.5% a year" — compounding makes it lower.

Absolute vs annualized return?
Absolute is the total gain over the whole period; annualized converts it to a per-year compounded rate.

Should I include dividends?
Yes — enter them so the total return reflects everything received.

What if I lost money?
The return shows as negative and the performance indicator turns red.