@8sarveshg I think you are mixing money weighted returns with time weighted returns. What you have described is money weighted returns which are highly sensitive to timing and amount of cashflows. time-weighted returns are not impacted by timing and size of cashflows. All fund managers generally use time weighted returns to report their performance as they do not control cashflows.
I am posting my earlier post from different thread on the same topic.
Also look for a presentation I made to ValuePickr Mumbai meeting on this topic. It has a PPT and an Excel template for calculating returns.
