Use our ROI Calculator to instantly measure return on investment, compare opportunities, and understand exactly how your money is performing over time.
What is ROI and why it matters
Return on Investment, or ROI, is a simple percentage that shows how much profit or loss you made relative to what you originally invested. It is one of the most widely used metrics in business, marketing, real estate, and personal finance because it helps you quickly compare the efficiency of different investments. Whether you are evaluating an ad campaign, a software project, a rental property, or a stock purchase, ROI provides a common language to understand results.
At its core, ROI answers this question: for every unit of currency you invested, how much did you get back? A positive ROI indicates profit; a negative ROI indicates loss; and an ROI of zero means you broke even.
How to use the ROI Calculator
Our ROI Calculator is designed to be fast and accurate. Gather a few numbers and you will have results in seconds.
Steps
- Select your preferred currency for clear, formatted results.
- Enter your Initial Investment, the total amount you put in at the start.
- Enter the Total Return, the total amount you eventually received from the investment.
- Optionally, provide a Time Period and choose Months or Years to see annualized and monthly ROI rates.
- Click Calculate ROI to view net profit, ROI percentage, and return multiple.
ROI formula, explained in plain language
The classic ROI formula is: ROI = (Net Profit ÷ Cost of Investment) × 100. In practical terms, Net Profit is simply your Total Return minus your Initial Investment. For example, if you invested 5,000 and received 6,500 back, your Net Profit is 1,500. Divide 1,500 by the original 5,000 to get 0.30 and multiply by 100 for an ROI of 30%.
Annualized ROI for time-based comparisons
ROI by itself does not include time, which can make comparisons tricky. Earning 30% in three months is much different from earning 30% in three years. When you enter a Time Period, the calculator converts your total return into an annualized rate using compounding. This lets you compare opportunities of different durations on an apples-to-apples basis. You will also see an average monthly ROI for additional context.
Interpreting your results
- Net Profit shows how much you earned after subtracting your initial outlay.
- ROI Percentage shows profit relative to cost; above 0% is profit, 0% is break-even, below 0% is a loss.
- Return Multiple shows how many times your money came back; for instance, 1.30x means you received 30% more than you invested.
- Annualized ROI and Monthly ROI help you evaluate speed of returns when time is provided.
When to use ROI
Use the ROI Calculator to evaluate marketing campaigns, product launches, equipment purchases, training programs, real estate projects, and investment portfolios. Any initiative where you can define money invested and money returned can be analyzed. For businesses, this supports better budgeting, performance tracking, and decision-making. For individual investors, it helps compare assets and strategies with discipline.
Example
Imagine you spend 8,000 on a campaign and generate 10,400 in total revenue attributable to it. Your Net Profit is 2,400. ROI equals 2,400 divided by 8,000, or 0.30, which is 30%. If that return was achieved in 6 months, the annualized ROI would be greater than 30% because it reflects the speed of the return on a yearly basis.
Best practices
- Use consistent, accurate data for investment and return figures.
- Include all relevant costs in your initial investment to avoid overstating ROI.
- Use the time period to compare projects of different lengths fairly.
- Pair ROI with other metrics such as cash flow, risk, and payback period for a fuller picture.
With our ROI Calculator, you can make faster, clearer decisions and prioritize the projects that create the most value.