ROI calculator
Calculate return on investment (ROI) from initial cost, final value (or net profit), and optional time period. ROI = (gain − cost) ÷ cost × 100%. See annualized ROI when investments span multiple years, and compare with ROAS (return on ad spend) for marketing — revenue per ad dollar, not full profit. Useful for ads, equipment purchases, and project business cases.
Amount invested
Amount returned
Result
Profit / loss: 300
ROI: +30%
How to calculate ROI
1. Enter amount invested (cost) and amount returned (final value or revenue).
2. Optionally enter net profit instead if costs are already deducted.
3. Set holding period in months or years for annualized ROI.
4. Compare ROI % with ROAS if measuring ad campaigns (revenue ÷ ad spend).
ROI calculation examples
Equipment purchase
Machine €12,000; generates €18,000 net value over life → gain €6,000; ROI = 6,000 ÷ 12,000 × 100 = 50%.
Annualized over 3 years
Same 50% total over 3 years → annualized ROI ≈ 14.5% using compound annualization, not 50% ÷ 3.
ROAS vs ROI on ads
€1,000 ad spend → €4,200 revenue. ROAS = 4.2×. If product margin 30%, profit ≈ €1,260; ROI on ad spend = 26% — ROAS looks great but ROI accounts for margin.
When to use this tool
• When you compare two projects with different upfront costs and payoffs.
• When you report marketing efficiency to stakeholders (ROI and ROAS side by side).
• When you annualize multi-year investments for apples-to-apples comparison.
When to choose something else
• When cash flows arrive unevenly — use IRR/NPV spreadsheets.
• When risk-adjusted return matters — ROI ignores volatility.
• When accounting profit needs GAAP rules — use financial statements.
Using ROI in business decisions
ROI alone ignores payback period: 80% ROI over 10 years may lose to 30% ROI over 1 year depending on cash needs. Pair ROI with payback months and strategic value (market share). For marketing, attribute revenue carefully — last-click ROAS overstates branded search. Use blended MER (total revenue ÷ total marketing) alongside campaign ROI.
Annualization and comparing alternatives
A solar install with 12% ROI over 20 years vs stock market 8% annualized: compare annualized figures, then risk. ROI on training = (productivity gain − course cost) ÷ course cost — quantify benefits or ROI becomes guesswork. Document assumptions; this calculator performs the arithmetic once you supply consistent cost and gain numbers.
Frequently asked questions
What is the ROI formula?
ROI (%) = (Net gain ÷ Cost of investment) × 100. Negative ROI means a loss.
ROI vs ROAS?
ROAS = Revenue from ads ÷ Ad spend. ROI uses profit (after costs). High ROAS can still mean low ROI if margins are thin.
How is annualized ROI calculated?
Compound formula: ((Final ÷ Initial)^(1/years) − 1) × 100. Simple division by years misstates growth.
Can ROI exceed 100%?
Yes — doubling money is 100% ROI; tripling is 200%.
Does ROI include time value of money?
Basic ROI no; annualized ROI partially addresses time. NPV/discounting goes further for finance teams.
Is my data sent to a server?
No.
Is this tool free?
Yes.