ROI Calculator
Use this calculator to calculate the return on investment (ROI) for an investment. ROI is a performance measure used to evaluate the efficiency of an investment.
Professional ROI Analyzer
Evaluate capital efficiency and annualized growth rates.
Capital Flow
Performance Metrics
Annualized Return (CAGR)
Compounded annual growth rate over 2 years
ROI = (Net Profit / Total Cost) × 100
CAGR = [(Final / Cost)^(1/t)] - 1
What is ROI (Return on Investment)?
Return on Investment (ROI) is a financial metric used to evaluate the profitability of an investment. It measures the amount of return on an investment relative to its cost. ROI is one of the most popular performance measurement and evaluation tools used by businesses and investors worldwide.
ROI Formula Explained
ROI = (Net Profit / Initial Investment) × 100
Net Profit = Final Value − (Initial Investment + Additional Costs)
How to Calculate ROI - Simple Explanation
Calculating ROI is straightforward and can be broken down into these simple steps:
- Determine your initial investment - This is the amount of money you invested at the beginning.
- Calculate your final value - This is what your investment is worth now or at the end of the period.
- Account for additional costs - Include any fees, maintenance costs, or other expenses related to the investment.
- Apply the formula - Subtract the total cost from the final value, divide by the total cost, and multiply by 100 to get a percentage.
Practical Example
Scenario: You invested $10,000 in stocks, paid $200 in trading fees, and after one year, your stocks are worth $15,000.
- Initial Investment: $10,000
- Additional Costs: $200
- Final Value: $15,000
- Net Profit: $15,000 - ($10,000 + $200) = $4,800
- ROI: ($4,800 / $10,200) × 100 = 47.06%
Why is ROI Important?
- Easy to understand - ROI is expressed as a simple percentage, making it easy to compare different investments.
- Universal metric - It can be applied to almost any type of investment, from stocks to marketing campaigns.
- Decision-making tool - Helps you evaluate whether an investment is worth pursuing or continuing.
- Performance tracking - Allows you to monitor and compare the performance of multiple investments over time.
Age Calculator FAQ
ROI (Return on Investment) is a financial metric that measures the profitability of an investment. It shows how much profit or loss you make compared to the amount you invested, usually expressed as a percentage.
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