Basic overview
The latest version of Moodle includes a gradebook aggregation method, "Natural” weighting. This is the default in course sites and it is the recommended method for setting up your gradebook.
How it works
When you enter Gradebook setup in a newly-created course site, "Natural" weight will be your default course aggregation method. You can add grade items or categories at the bottom of the page, while graded activities such as assignments created in your course site will automatically appear in Gradebook. Your categories/items will have four columns - name, weight, max grade, and an “Actions” column for editing a category or item.

The max grades of each of your items will add up to the course total. If you want to use weights in your calculation, click the check-box next to each of the items and enter your adjusted weights. (You can set weights for individual items, but usually you will weigh all or none of the items in a category).

Tip: If you are going to set weights, it is best to first create all of your categories in the gradebook (or all items, if you are not using categories). The system will automatically adjust your weights to add up to 100%, so setting weights is easiest once all relevant items are present to be weighted.
Editing a gradebook item
If you need to edit a category or item, just click the Edit drop-down in the Actions column. This will allow you to Edit the grade item settings, make the item visible or invisible to students, as well as reset the weights in the category. For categories, you can change the category settings, *including aggregation method if you wish to use a different one.

*What grade aggregation method should I choose?
Natural
This is the recommended aggregation setting for most users. Using this method, you are able to set up your gradebook in one of two ways:
1) Weighted mean of grades: by checking all of the “weights” boxes in the gradebook setup page, the natural aggregation method will ignore the point value of each grade item, and will calculate a student’s final grade according to the relative weight of each grade item. Please note that when prompting the grade book to calculate in this manner, (a) the sum of all user-specified weights must equal 100, and (b) the "Course Total" at the bottom of the gradebook setup page can be ignored because its value is functionally arbitrary. This is the most popular way of calculating student grades.
2) Sum of grades: by leaving all of the “weights” boxes in the gradebook setup page unchecked, the natural aggregation method will only consider the absolute number of points that each grade item is worth when calculating a student's final grade.
Simple weighted mean of grades - this aggregation method can useful to apply to specific categories within the gradebook in a few unique circumstances:
1) Ensuring equal weighting of daily iClicker scores when individual sessions carry different maximum point totals: For example, some instructors who use iClicker in their classrooms/lecture halls may include more question prompts in some sessions than in others, but still would like each session to be of overall equal value to the others.
2) Enabling gradebook to apply the "Drop the lowest” feature when individual grade items carry different maximum point totals: For example, some instructors would like the gradebook to automatically draw a student's lowest quiz score, even if the quiz in question has more/fewer questions than other quizzes (note that even though quizzes may have different “nominal” point values, they our weighted identically relative to each other).
Gradebook settings
Many of the gradebook settings are accessible from a tab on the Gradebook setup page. Click on Gradebook setup first, then click Course grade settings.

User report
The user report includes an option for a column that displays the “contribution to course total.” This shows the student how much their score on an item ended up counting for their total grade (added up, this column equals the student’s total percentage in the course).

Extra credit
When adding an extra credit item or category, you must first create the item and add it to the Gradebook setup page, then click Edit settings under the Action dropdown and choose Extra Credit.
