I am going to be backtesting a Long/Short equity strategy and need some guidance on how best to deal with the short book. I was thinking that for each portfolio I would go long 50 equities and go short 50 equities. I plan on doing this test in excel by the way.

I am trying to wrap my brain around how to appropriately handle this. 

My thought was:

**Portfolio 1**

Longs
MSFT
CSCO
ORCL
AMZN
Portfolio Returns
Benchmark Returns
Out/Under-performance

Shorts
HII
HP
BBBY
YHOO
Portfolio Returns
Benchmark Returns
Out/Under-performance

My first question is whether I would simply flip the sign on the short book in order to get performance for that piece of the portfolio. And secondly whether I would simply add short performance to long performance to get net performance. I would like to include some assumptions about margin but not sure how to appropriately do this -- If you have any suggestions I would appreciate it.