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ROI
Net Profit
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ROI
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return on cost
Annualized ROI
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ROI = (Net Profit / Cost) × 100
Annualized ROI = (1 + ROI/100)^(1/years) − 1
Annualized ROI = (1 + ROI/100)^(1/years) − 1
Break-even Calculator
How much must the investment grow to achieve
% ROI?
Required value: —
ROI Sensitivity — Varying Investment Amount
| Investment | Net Profit | ROI | Annualized ROI |
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ROI Calculator — Tips & Guide
Return on Investment is the most universal metric for evaluating whether a decision was profitable. Use this calculator to compare investments, marketing spend, and real estate yields.
Always Annualize ROI
A 50% ROI over 5 years sounds great, but that's only ~8.4% annualized — which may underperform an index fund. Always compare annualized figures for apples-to-apples comparison.
Include All Costs
Fees, taxes, storage, maintenance, and opportunity cost all eat into ROI. A $4,000 return on a $10,000 investment looks like 40% ROI, but add $500 in fees and it drops to 35%.
ROI Ignores Time Value
The same ROI over different time periods is not equal. Use Annualized ROI (CAGR) or Net Present Value (NPV) when comparing investments with different timeframes.
ROI (Return on Investment) is a performance metric that measures the efficiency of an investment. It's calculated as (Net Profit / Cost) × 100. A 25% ROI means you gained $25 for every $100 invested. It's expressed as a percentage and can be positive (gain) or negative (loss).
It depends on the asset class and time period. For stocks, the historical average annual return of the S&P 500 is roughly 10% (7% inflation-adjusted). For real estate, 8–12% annual ROI is generally considered good. For marketing campaigns, a 5:1 revenue-to-spend ratio (400% ROI) is often cited as a strong benchmark. Short-term investments should clear your hurdle rate — the minimum return you'd accept versus a risk-free alternative.
ROI = ((Final Value − Initial Cost) / Initial Cost) × 100. Example: you invest $10,000 and it grows to $13,500. Net profit = $3,500. ROI = ($3,500 / $10,000) × 100 = 35%. If you held that investment for 2 years, the annualized ROI (CAGR) = (1.35)^(1/2) − 1 = 16.2% per year.
ROI measures return relative to the cost of an investment, while profit margin measures net profit relative to revenue. Example: you spend $10,000 to generate $25,000 in revenue with $15,000 in costs. Profit = $0. Profit margin = 0%. But ROI on the $10,000 spent = ($25,000 − $10,000 − $15,000) / $10,000 × 100 = 0%. Both measure profitability but from different angles — ROI from the investor's perspective, margin from the revenue perspective.