ROI Calculator
Calculator
Results
- Return on investment (%)
- 50
- Net return
- 6,000
- Return multiple
- 1.5
Results
| Return on investment (%) | 50 |
| Net return | 6,000 |
| Return multiple | 1.5 |
formula-map diagram
- Return on investment (%)
- 50
- Net return
- 6,000
- Return multiple
- 1.5
Formula breakdown
Formula
ROI % = (Final value − Cost) ÷ Cost × 100= 50
Note
This is a simplified model. Results use standard textbook definitions and ignore taxes, seasonality, attribution lag, discounting and accounting policy differences. Use them as an estimate, not as accounting, tax or investment advice.
More in Business and marketing
See all →Frequently asked questions
What does ROI measure and how is it calculated?+
Return on investment (ROI) measures the profitability of an investment relative to its cost: ROI % = ((gain from investment - cost of investment) / cost of investment) x 100. It's a simple way to compare the efficiency of different investments regardless of their size.
Why does ROI need a time period to be meaningful?+
A 20% ROI over one month is vastly more impressive than a 20% ROI over ten years, but the raw ROI percentage alone doesn't show the time frame, so comparing investments requires knowing (or annualizing) the holding period. Always pair ROI with its time frame for a fair comparison.
How do you annualize ROI to compare investments of different durations?+
Annualized ROI accounts for compounding over the actual holding period, typically calculated as ((1 + ROI)^(1/years)) - 1, converting a total return over any time span into an equivalent yearly rate. This lets you fairly compare a 2-year investment against a 5-year one.
Does ROI account for risk?+
No — ROI is purely a measure of return relative to cost and says nothing about the volatility or probability of losing money along the way, so two investments with identical ROI can carry very different risk levels. Risk-adjusted metrics like the Sharpe ratio are needed for that comparison.
What costs should be included when calculating ROI?+
All costs directly tied to acquiring and maintaining the investment should be included — purchase price, fees, taxes, and maintenance costs — not just the sticker price, since omitting these inflates the calculated ROI above the investment's true profitability.