What Is an ROI Calculator?
An ROI (Return on Investment) calculator measures the profitability of an investment relative to its cost. It expresses the gain or loss as a percentage, providing a clear and simple metric for comparing different investment opportunities or business decisions.
How to Use This ROI Calculator
- Enter the initial cost of the investment.
- Input the final value or total revenue generated from the investment.
- Click “Calculate” to see the ROI percentage, net profit, and a summary of the investment outcome.
Key Concepts
ROI is calculated as (Net Profit ÷ Cost of Investment) × 100. A positive ROI indicates a profitable investment, while a negative ROI signals a loss. While ROI is intuitive and widely used, it does not account for the time horizon—a 50% ROI over one year is far better than 50% over ten years. For time-adjusted comparisons, annualized ROI or CAGR provides a more accurate perspective.
ROI = ((Gain − Cost) ÷ Cost) × 100
Frequently Asked Questions
What is a good ROI?
A “good” ROI depends on the context. For stock market investments, a 7–10% annual return is considered solid. For business projects, an ROI above the company’s cost of capital is generally favorable.
Does ROI account for time?
Standard ROI does not factor in how long an investment was held. Use annualized ROI to compare investments with different time horizons on an equal basis.
Can ROI be negative?
Yes. A negative ROI means the investment lost money. The magnitude of the negative percentage indicates how much of the initial investment was lost.