Example: If my balance yesterday was $10,000 and my balance today is $12,500, but my $2,000 deposit was reflected in the balance today... the Daily Return would be ((12,500 - 2000) / 10,000) - 1 = 5%. Without adjusting for the deposit, it would instead appear is if the return was 25%!
This smoothing calculation is what makes Cumulative Return possible and accurate.
