ROI Calculator
Adjust the inputs below. Results update as you type.
How it works
Return on investment (ROI) is a simple ratio that compares gain to cost: (gain − cost) ÷ cost, usually shown as a percent. It is useful for comparing discrete projects, campaigns, or one-time purchases when cash flows are straightforward and the time horizon is short enough that “when” money arrives matters less than “how much.”
Enter the amount invested (or total cost) and the amount returned (or ending value). Positive ROI means the return exceeded cost; negative ROI means a loss relative to cost. For multi-year projects, consider annualizing or using NPV/IRR-style thinking instead of a single ROI number—otherwise a 40% gain over ten years looks identical to a 40% gain over one year.
Common mistakes include omitting fees and taxes from cost, counting revenue without matching incremental costs, and comparing ROIs across projects with different risk or liquidity. Use this calculator for quick relative ranking, then stress-test assumptions and time before committing capital.
Input guidance
- Cost should include fees and incremental expenses tied to the project.
- Return should reflect net proceeds, not gross revenue alone.
- Keep the time horizon explicit when comparing projects.
The formula
Return on investment = (gain − cost) ÷ cost, as a percentage. Annualized ROI adjusts for the holding period: ((1 + ROI)^(1/years) − 1).
Worked example
Buying for $5,000 and selling for $6,500 gives ROI = (6,500 − 5,000)/5,000 = 30%. Over 3 years, the annualized return is about 9.1%.
More examples to test
- $8,000 campaign cost returning $11,200 revenue: compute ROI and margin after $1,000 fees.
- Compare two projects with similar ROI but different durations.
How to interpret results
ROI ranks simple one-period outcomes. For multi-year or uneven cash flows, follow up with timing-aware metrics before funding.
When this can be inaccurate
Ignores time value of money, risk differences, and liquidity. Easy to game by omitting costs.
Change history
- July 2026: Clarified ROI vs multi-year NPV/IRR limitations.
- June 2026: ROI ratio and edge cases reviewed.
Site-wide corrections also appear on the corrections log.
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Frequently asked questions
What is a good ROI?+
It depends on the risk and alternatives. Compare against benchmarks like the stock market's long-term average and the time and risk involved.
Why annualize ROI?+
A 30% total return over 5 years is very different from 30% in one year. Annualizing lets you compare investments held for different periods.
Does ROI include all costs?+
It should. Include fees, taxes, and other expenses in the cost so the return reflects what you actually earned.
Is a higher ROI always better?+
Not by itself. Short projects can look better on ROI than longer ones that create more total value after risk and timing are considered.
When should I use IRR instead?+
Use IRR (or another timed cash-flow metric) when money goes in and out over multiple periods rather than a single cost and return.