ROI Calculator
Calculate Return on Investment (ROI) to evaluate the efficiency of an investment.
Investment Details
Return Analysis
ROI Percentage
0.00%
Evaluating Investment Efficiency
Whether you are buying stocks, real estate, or running Facebook ads, you need to know: “Is it worth it?”
Interpreting the Score:
- 0% ROI: You broke even. You gained nothing, lost nothing (except time).
- Positive (+ve): Your investment grew.
- Negative (-ve): Your investment shrank.
Limitations of ROI
ROI is a simple snapshot. It doesn’t tell you:
- Risk: High ROI often comes with high risk.
- Time: As mentioned in FAQs, always consider how long it took to get that return.
- Liquidity: Can you get your money out easily? ROI doesn’t say.
Frequently Asked Questions
What is ROI?
Return on Investment (ROI) is a popular profitability metric used to evaluate how well an investment has performed. It is expressed as a percentage.
What is the ROI formula?
ROI = `((Net Profit / Cost of Investment) * 100)`. Net Profit is Final Value minus Initial Investment.
What is a good ROI?
It depends on risk and time. An ROI of 7% is great for a safe bond, but might be poor for a high-risk startup investment. Generally, any positive ROI that beats inflation is 'good'.
Can ROI be negative?
Yes. A negative ROI means you lost money on the investment. Example: You invested 100 and got back 80. ROI is -20%.
Does ROI include time factor?
Standard ROI does NOT account for time. A 20% ROI over 1 year is amazing. A 20% ROI over 10 years is terrible. Use 'Annualized ROI' (CAGR) for time-based comparison.
How to calculate Annualized ROI?
Simply use our CAGR Calculator. The formula is `((Final/Initial)^(1/years) - 1) * 100`.
Is ROI same as ROE?
No. ROE (Return on Equity) measures a company's profitability relative to shareholder's equity. ROI measures the return on a specific investment or project.
How do I calculate Marketing ROI?
Marketing ROI = `(Sales Growth - Marketing Cost) / Marketing Cost`. It helps determine if your ads are actually generating profit.
Does ROI account for taxes?
Usually, simple ROI is calculated pre-tax. To get the real picture, you should deduct taxes from the Net Profit before calculating.
Why is ROI important for business?
It helps in decision making. If Option A has 15% ROI and Option B has 5% ROI, a business will likely choose Option A.