ROI Calculator
Calculate your return on investment, profit or loss, and ROI percentage from your investment cost and final value.
ROI = (Profit / Loss ÷ Initial Investment) × 100
What is the ROI Calculator used for?
The ROI Calculator is used to determine how much return an investment produces compared with its cost. It can help evaluate a business project, marketing campaign, purchase, or other financial decision by comparing the investment gain with the initial investment. The result shows whether the investment produced a gain or loss relative to the amount originally spent.
How do I calculate return on investment?
To calculate return on investment, subtract the original investment cost from the final value to find the gain, then divide that gain by the original cost. For example, if an investment costs $5,000 and later becomes $6,000, the gain is $1,000. Dividing $1,000 by $5,000 gives 0.20, which represents a 20% return.
What information is needed to calculate ROI?
A basic ROI calculation needs the original amount invested and the amount received or gained from that investment. These values are sometimes described as the cost basis and the final return. If additional expenses are involved, they should be included when determining the actual investment cost or net profit so the result reflects the money genuinely spent.
Can ROI be expressed as a percentage?
Yes. ROI is commonly expressed as a ROI percentage, which makes it easier to understand the return relative to the amount invested. For instance, an ROI of 15% means the gain equals 15% of the original investment cost. ROI can also be written as a decimal, such as 0.15, before converting it to a percentage.
Can I compare two investments using ROI?
Yes, ROI can be used for an investment comparison by calculating the percentage return for each investment. Suppose one investment produces a 12% ROI and another produces 18%; the second has the higher return relative to its cost. However, ROI alone does not show factors such as investment duration, risk, cash-flow timing, or the total amount of money involved.