ROI Calculator
Calculate your return on investment (ROI) instantly by entering your initial investment cost and the final return value to see your percentage gain or loss.
Quick answer
ROI (Return on Investment) is calculated by dividing the net profit by the initial cost and multiplying by 100 to get a percentage. The formula is ROI = ((Return - Cost) / Cost) × 100. A positive ROI means you gained money; a negative ROI means you lost money. For example, investing export const batch4Tools: ToolContent[] = ,000 and receiving export const batch4Tools: ToolContent[] = ,200 back yields an ROI of 20%. ROI is one of the most widely used metrics for evaluating the efficiency of an investment.
Formula & method
ROI (%) = ((Return − Cost) / Cost) × 100
- Return — Total amount received from the investment
- Cost — Initial amount invested (must be greater than zero)
- ROI — Return on Investment expressed as a percentage
Expresses the net gain or loss relative to the initial investment as a percentage.
Net Profit = Return − Cost
- Net Profit — The dollar amount gained (positive) or lost (negative)
The absolute dollar gain or loss from the investment.
Examples
- Input
- cost: 1000 | return: 1200
- Result
- ROI = 20.00%
- Why
- Net profit = export const batch4Tools: ToolContent[] = ,200 − export const batch4Tools: ToolContent[] = ,000 = $200. ROI = ($200 / export const batch4Tools: ToolContent[] = ,000) × 100 = 20.00%. You gained 20% on this investment.
- Input
- cost: 5000 | return: 8500
- Result
- ROI = 70.00%
- Why
- Net profit = $8,500 − $5,000 = $3,500. ROI = ($3,500 / $5,000) × 100 = 70.00%. A strong return of 70% on this investment.
- Input
- cost: 50000 | return: 45000
- Result
- ROI = −10.00%
- Why
- Net profit = $45,000 − $50,000 = −$5,000. ROI = (−$5,000 / $50,000) × 100 = −10.00%. This campaign resulted in a 10% loss.
- Input
- cost: 10000 | return: 13500
- Result
- ROI = 35.00%
- Why
- Net profit = export const batch4Tools: ToolContent[] = 3,500 − export const batch4Tools: ToolContent[] = 0,000 = $3,500. ROI = ($3,500 / export const batch4Tools: ToolContent[] = 0,000) × 100 = 35.00%. The equipment generated a healthy 35% return.
Frequently asked questions
What is a good ROI percentage?
A 'good' ROI depends on the asset class and time horizon. For stock market investments, an annual ROI of 7–10% is commonly considered solid (historical S&P 500 average). Real estate often targets 8–12% per year. Short-term business projects may demand 20% or higher to justify the risk. Always compare ROI against the opportunity cost and risk level of alternative investments.
What is the difference between ROI and annualized ROI?
The basic ROI formula gives a total percentage return regardless of how long the investment was held. Annualized ROI adjusts for the holding period so you can compare investments of different durations on a per-year basis. Annualized ROI = ((1 + ROI/100)^(1/years) − 1) × 100. For example, a 21% ROI over 3 years equals an annualized ROI of approximately 6.6% per year.
Can ROI be negative?
Yes. A negative ROI means the investment lost money — the return was less than the initial cost. For example, investing export const batch4Tools: ToolContent[] = 0,000 and receiving only $8,000 back gives an ROI of −20%. Negative ROI results should prompt a review of the investment strategy or underlying assumptions.
What costs should I include in the 'initial cost' field?
Include every out-of-pocket expense tied to the investment: purchase price, commissions, fees, installation, training, maintenance, taxes, and any other direct costs. Omitting hidden costs inflates ROI artificially. For marketing ROI, include ad spend, agency fees, creative production, and attribution costs.
How is ROI different from profit margin?
ROI measures the efficiency of an investment relative to its cost and is typically used to evaluate capital allocation decisions. Profit margin measures what percentage of revenue is kept as profit and is used to assess business profitability. Both are important financial metrics but answer different questions.
Does ROI account for the time value of money?
Basic ROI does not account for the time value of money. For long-term investments, metrics like Net Present Value (NPV) or Internal Rate of Return (IRR) are more appropriate because they discount future cash flows to present value. ROI is best suited for quick comparisons and shorter time horizons where time-value effects are minimal.
Sources & references
- https://www.investopedia.com/terms/r/returnoninvestment.asp
- https://www.cfainstitute.org/en/membership/professional-development/refresher-readings/return-concepts
- https://www.sec.gov/investor/pubs/tenthingstoconsider.htm
External references open in a new tab. We are independent and not affiliated with these organizations.
- ✓ Free to use
- ✓ No sign-up required
- ✓ Runs entirely in your browser — nothing is uploaded.
- ✓ Formula and method shown above
Provided “as is” for general information only — results may be inaccurate, so verify before you rely on them. No warranty; use at your own risk.
Built and reviewed by HIFreeTools against the formula shown above and any authoritative references cited on this page. See our methodology and editorial standards.
Related tools
- Profit Margin CalculatorFinance
- Compound Interest CalculatorFinance
- Simple Interest CalculatorFinance
- Savings Goal CalculatorFinance
Embed this tool on your site
Free to embed, no sign-up. Paste this code where you want the roi calculator to appear: