Return on Investment (ROI) Calculator
Calculate the exact ROI percentage and net profit on any investment.
Understanding Return on Investment (ROI)
Return on Investment (ROI) is a simple, universal metric used to evaluate the efficiency and profitability of an investment. It is expressed as a percentage, making it easy to compare completely different types of investments—like comparing a real estate flip to a stock purchase.
The ROI Formula
The standard formula is: ROI = (Net Profit / Cost of Investment) × 100. Your Net Profit is simply your total gain minus your initial cost.
Worked Example
- Investment Cost: $10,000
- Total Gain (Revenue): $15,000
- Net Profit: $15,000 - $10,000 = $5,000
- ROI = ($5,000 / $10,000) * 100 = 50%.
Frequently Asked Questions
Does ROI account for time?
No, standard ROI does not account for the holding period. A 50% ROI over one year is incredible, but a 50% ROI over 30 years is terrible. To compare timeframes, you must calculate the annualized ROI.
Disclaimer: This calculator is for educational and informational purposes only. It is not a substitute for professional financial advice. Results are estimates based on the information provided and may not reflect actual outcomes. Please consult with a qualified financial advisor, accountant, or tax professional before making any financial decisions. Past performance does not guarantee future results.