ROI Calculator
Use our free ROI Calculator to estimate the return on investment from an investment, business project, property purchase, marketing campaign, or other financial decision. Enter your initial investment and final value to calculate your profit and ROI percentage.
Calculate Your Return on Investment
ROI Breakdown
What Is ROI?
ROI stands for Return on Investment. It is a commonly used financial measurement that shows how much profit or loss was generated relative to the amount invested. ROI is usually expressed as a percentage.
For example, if you invest $10,000 and later receive $13,000 after accounting for the applicable costs, your profit would be $3,000. The ROI calculation compares that profit with the original investment amount.
ROI Formula
The basic ROI formula is: ROI = (Net Profit ÷ Investment Cost) × 100. Net profit is generally calculated by subtracting the total investment cost from the final value.
Adding additional costs can provide a more realistic estimate. Depending on the situation, costs could include transaction fees, maintenance expenses, commissions, advertising costs, or other expenses associated with the investment.
Why ROI Matters
ROI can be useful when comparing different financial opportunities. Businesses may use ROI to evaluate projects, advertising campaigns, equipment purchases, or expansion decisions. Individual investors may use ROI to understand the performance of an investment.
However, ROI does not tell the complete story. Two investments can have the same ROI but require very different amounts of time. For that reason, investors may also consider annualized returns, risk, taxes, fees, and liquidity.
Frequently Asked Questions
What is a good ROI?
There is no universal ROI that is considered good for every situation. A reasonable return depends on the type of investment, time period, risk, inflation, and available alternatives.
Can I use this ROI calculator for real estate?
Yes. You can use it for a basic estimate of real estate ROI by entering the investment cost, additional expenses, and final value.
Is ROI the same as profit?
No. Profit is the amount of money gained or lost, while ROI expresses that result relative to the amount invested, usually as a percentage.