ROI Calculator
The ROI calculator finds your return on investment as a percentage, your net profit, and your annualised ROI for any investment or purchase. Enter the cost of your investment and the amount you received back — the calculator returns your ROI instantly. No signup required, and it works for any currency or investment type.
Whether you are evaluating a marketing campaign, comparing business investments, calculating the return on a stock purchase, or deciding whether a new tool is worth buying, this ROI calculator gives you the exact numbers in seconds. You can also calculate annualised ROI to compare investments held for different time periods on a level footing.
Also useful: our ROAS Calculator measures return on ad spend for any paid campaign, and our Break-Even Calculator finds the minimum revenue you need to cover your costs before turning a profit.
ROI Calculator
Calculate return on investment, net profit, and payback period.
Annualized ROI
Compare investments of different time lengths fairly using annual returns.
Compare Investments
Compare up to 3 investments side by side to find the best ROI.
What Is ROI?
ROI — Return on Investment — is a percentage that measures how much you gained or lost relative to what you invested. It is one of the most widely used metrics in business and finance because it puts every investment on a common scale regardless of size, currency, or type.
A positive ROI means the investment returned more than it cost. A negative ROI means the investment lost money. An ROI of 100% means you doubled your money — you got back exactly what you put in plus an equal amount in profit.
ROI does not account for time by itself — a 50% ROI over 10 years is far less impressive than a 50% ROI over 6 months. This is why annualised ROI is used when comparing investments held for different durations. The ROI calculator above calculates both standard ROI and annualised ROI when you enter the investment duration.
ROI Formula — How to Calculate Return on Investment
The standard ROI formula is straightforward:
ROI
((Net Return − Investment Cost) ÷ Investment Cost) × 100
Or equivalently:
ROI
((Final Value − Initial Investment) ÷ Initial Investment) × 100
Example: You invest $5,000 in a marketing campaign. The campaign generates $8,000 in revenue. Net return = $8,000 − $5,000 = $3,000. ROI = ($3,000 ÷ $5,000) × 100 = 60%.
A 60% ROI means for every dollar invested, you earned 60 cents in profit on top of getting your original dollar back.
Net Profit vs Gross Return
An important distinction: ROI should be calculated on net profit, not gross revenue. If your $5,000 campaign generates $8,000 in revenue but the products sold cost $2,000 to produce, your net profit is $8,000 − $5,000 (campaign) − $2,000 (cost of goods) = $1,000. ROI = ($1,000 ÷ $5,000) × 100 = 20% — not 60%.
Always include all relevant costs in your investment figure: purchase price, fees, taxes, operating costs, and any other expenses directly tied to the investment. Overstating ROI by excluding costs is one of the most common errors in investment analysis.
How to Use This ROI Calculator
This ROI calculator has three modes. Choose the one that matches what you need to find:
Mode 1 — Standard ROI (Investment Cost + Return)
The most common calculation. Enter what you invested and what you got back — the calculator returns your ROI percentage, net profit, and profit multiple.
- Enter the total investment cost (all costs combined)
- Enter the total return (final value or total revenue)
- The calculator returns ROI %, net profit in dollars, and profit multiple (e.g. 1.6× means you got back $1.60 for every $1 invested)
Example: Investment cost $2,000, total return $3,400. Net profit = $1,400. ROI = ($1,400 ÷ $2,000) × 100 = 70%.
Mode 2 — Annualised ROI
Annualised ROI converts your total ROI into an equivalent annual rate, allowing fair comparison between investments held for different periods.
Annualised ROI
((1 + ROI ÷ 100) ^ (1 ÷ Years) − 1) × 100
- Enter the investment cost and total return
- Enter the investment duration in months or years
- The calculator returns both standard ROI and annualised ROI
Example: A $10,000 investment returns $15,000 over 3 years. Total ROI = 50%. Annualised ROI = ((1.50) ^ (1/3) − 1) × 100 = 14.47% per year. Compare this to another investment with a 30% ROI over 18 months — annualised that is ((1.30) ^ (1/1.5) − 1) × 100 = 19.26% per year — making the second investment more efficient despite the lower total ROI.
Mode 3 — Target ROI (Reverse Calculation)
Enter your investment cost and a target ROI percentage — the calculator tells you the minimum return you need to hit that target.
Required Return
Investment Cost × (1 + Target ROI ÷ 100)
- Enter the investment cost
- Enter your target ROI percentage
- The calculator returns the minimum total return and minimum net profit required
Example: You invest $8,000 and want at least a 25% ROI. Required return = $8,000 × 1.25 = $10,000. You need to generate at least $10,000 in total return — meaning $2,000 in net profit — to hit your target.
What Is a Good ROI?
What counts as a good ROI depends entirely on the context — the type of investment, the time frame, and the risk involved. A higher-risk investment should deliver a higher ROI to justify taking on that risk. A lower-risk investment delivering a modest ROI may be more valuable than a high-risk investment delivering the same return.
| Investment Type | Average ROI | Notes |
|---|---|---|
| S&P 500 (stock market) | ~10% per year | Historical average before inflation |
| Real estate | 8% – 12% per year | Varies widely by location and property type |
| Small business | 15% – 40% per year | Higher risk, higher expected return |
| Digital marketing (paid ads) | 200% – 500% | Varies by channel, niche, and execution |
| Email marketing | 3,600%+ | Extremely high average — low cost channel |
| SEO content | 275% – 1,000%+ | Compounds over time; delayed initial return |
| Savings account (US) | ~4% – 5% per year | Low risk, low return — 2026 rates |
These are broad averages. Individual results vary significantly. Use these as benchmarks for context, not as guarantees.
For business investments, a general rule of thumb: an ROI below the cost of capital means the investment is destroying value even if it is technically profitable. If your business borrows money at 8% interest, any investment with an ROI below 8% is costing you money in net terms.
ROI vs Other Investment Metrics
ROI is one of several ways to measure investment performance. Understanding how it relates to other metrics helps you choose the right tool for each situation.
| Metric | What It Measures | Best Used For | Limitation |
|---|---|---|---|
| ROI | Total return as % of cost | Comparing investments of any type | Does not account for time |
| Annualised ROI | Return per year (compounded) | Comparing investments of different durations | Assumes constant growth rate |
| ROAS | Revenue per dollar of ad spend | Paid advertising campaigns | Uses revenue, not profit |
| Payback Period | Time to recover investment | Cash flow planning | Ignores returns after payback |
| NPV | Present value of future returns | Long-term projects with cash flows | Requires discount rate estimate |
| IRR | Annualised return that makes NPV = 0 | Complex multi-period investments | Difficult to calculate manually |
ROI is the best starting point for most business decisions because it is simple to calculate and universally understood. Use NPV or IRR for long-term capital projects with irregular cash flows. Use ROAS specifically for advertising spend where you want to measure revenue generated per dollar spent rather than net profit.
How to Calculate ROI — Common Examples
Marketing Campaign ROI
To calculate marketing ROI, include all costs: ad spend, agency fees, creative costs, and any tools or software used. Measure the revenue directly attributable to the campaign — not total revenue for the period.
Marketing ROI
((Revenue from Campaign − Campaign Cost) ÷ Campaign Cost) × 100
Example: A Facebook ad campaign costs $3,000 (ad spend + creative + management). It generates $11,000 in tracked revenue from 55 sales at $200 average order value. Campaign cost of goods = 55 × $80 = $4,400. Net profit from campaign = $11,000 − $3,000 − $4,400 = $3,600. Marketing ROI = ($3,600 ÷ $3,000) × 100 = 120%.
Stock Investment ROI
For stocks, ROI includes capital gains (or losses) and any dividends received. Include transaction fees in your investment cost for accuracy.
Stock ROI
((Sale Price + Dividends − Purchase Price − Fees) ÷ (Purchase Price + Fees)) × 100
Example: You buy 100 shares at $45 each ($4,500 total) plus $10 in brokerage fees. You sell them 18 months later at $58 each ($5,800) minus $10 fee, and received $120 in dividends during that period. Total return = $5,800 − $10 + $120 = $5,910. Investment cost = $4,500 + $10 = $4,510. ROI = (($5,910 − $4,510) ÷ $4,510) × 100 = 31.04%.
Business Tool or Software ROI
To calculate ROI on a business tool, estimate the value it generates — time saved multiplied by hourly rate, revenue generated, or cost of the problem it solves — and compare it to the annual cost.
Example: A project management tool costs $1,200 per year for a 5-person team. It saves each team member 30 minutes per day on status updates and coordination. At an average hourly rate of $40: 30 min × $40/hour = $20 per person per day. 5 people × $20 × 250 working days = $25,000 in time savings per year. ROI = (($25,000 − $1,200) ÷ $1,200) × 100 = 1,983%. An obvious yes.
Real Estate ROI
Real estate ROI should include all costs: purchase price, closing costs, renovation costs, annual maintenance, property management fees, insurance, and taxes. Returns include rental income and capital appreciation.
Real Estate ROI
((Annual Rental Income + Appreciation − Annual Costs) ÷ Total Investment) × 100
Example: Property purchased for $250,000 with $10,000 in closing costs. Annual rental income = $18,000. Annual costs (mortgage interest, taxes, insurance, maintenance) = $14,000. Net annual income = $4,000. Estimated annual appreciation = $7,500 (3% of value). Total annual return = $11,500. ROI = ($11,500 ÷ $260,000) × 100 = 4.42% per year.
5 Common ROI Calculation Mistakes
- Using revenue instead of profit. ROI should be calculated on net profit, not gross revenue. A campaign that generates $50,000 in revenue on a $10,000 investment looks like a 400% ROI — but if the cost of goods sold is $35,000, the actual net profit is $5,000 and the real ROI is 50%. Always subtract all costs from revenue before calculating.
- Ignoring indirect costs. Many investments have costs beyond the obvious ones — management time, implementation effort, opportunity cost of capital, and ongoing maintenance. A software tool that costs $5,000 and takes 40 hours of staff time to implement at $50/hour has a true cost of $7,000. Leaving out indirect costs consistently overstates ROI.
- Comparing ROIs across different time periods without annualising. A 40% ROI sounds better than a 30% ROI until you find out the first took 5 years and the second took 8 months. Always annualise ROI when comparing investments of different durations — use Mode 2 in the ROI calculator above.
- Attributing all revenue to a single investment. Marketing attribution is complex — a customer who converts after seeing a Facebook ad may have also received an email, visited from organic search, and returned directly. Attributing 100% of the sale to the Facebook ad overstates that campaign’s ROI. Use multi-touch attribution models or a conservative partial-attribution approach.
- Not accounting for risk. Two investments with identical ROIs are not equally attractive if one is far riskier than the other. A 15% annual ROI from government bonds and a 15% annual ROI from a startup equity investment represent very different value propositions. Risk-adjusted ROI — comparing your return to a risk-free benchmark — gives a more complete picture.
Frequently Asked Questions
How do I calculate ROI?
Subtract the investment cost from the total return to get the net profit. Divide the net profit by the investment cost and multiply by 100 to get the ROI percentage. Formula: ROI = ((Total Return − Investment Cost) ÷ Investment Cost) × 100. Example: You invest $4,000 and receive $6,200 back. Net profit = $6,200 − $4,000 = $2,200. ROI = ($2,200 ÷ $4,000) × 100 = 55%. Use the ROI calculator above to get your result instantly.
What is a good ROI?
A good ROI depends on the investment type and duration. For stock market investments, 10% per year is considered a strong long-term average. For marketing campaigns, 200% to 500% ROI is common in well-run digital marketing. For business investments, the ROI should exceed your cost of capital — typically at least 15% to 25% for most small businesses. For savings, even 4% to 5% annual ROI is acceptable because of the low risk. There is no universal “good” ROI without context.
What is the difference between ROI and ROAS?
ROI (Return on Investment) measures net profit relative to total investment cost — it is a true profitability metric. ROAS (Return on Ad Spend) measures gross revenue generated per dollar of ad spend — it does not account for the cost of goods sold or other expenses. A campaign with a 5× ROAS ($5 in revenue for every $1 in ad spend) might have a very low or even negative ROI if the products being sold have thin margins. Use ROAS for quick advertising performance comparison and ROI for actual profitability analysis.
How do I calculate annualised ROI?
Annualised ROI converts your total return into an equivalent annual rate using compounding. Formula: Annualised ROI = ((1 + ROI ÷ 100) ^ (1 ÷ Years) − 1) × 100. Example: A 50% total ROI over 3 years. Annualised ROI = ((1.50) ^ (1/3) − 1) × 100 = 14.47% per year. This allows you to compare a 3-year investment with a 1-year investment on the same basis. Use Mode 2 in the ROI calculator above to calculate annualised ROI automatically.
Can ROI be negative?
Yes — a negative ROI means the investment lost money. If you invest $5,000 and receive only $3,500 back, your net profit is −$1,500 and your ROI is (−$1,500 ÷ $5,000) × 100 = −30%. A negative ROI does not always mean the investment was wrong — some investments have strategic value beyond immediate financial return, such as entering a new market or building brand awareness. But for purely financial decisions, a negative ROI indicates the investment destroyed value.
How do I calculate ROI for a marketing campaign?
Include all campaign costs: ad spend, creative production, agency or freelancer fees, and any tools used. Measure revenue directly attributable to the campaign — not total company revenue. Subtract both campaign costs and the cost of goods sold for items sold through the campaign. Formula: Marketing ROI = ((Revenue − COGS − Campaign Cost) ÷ Campaign Cost) × 100. If attribution is difficult, use conservative estimates or a partial-attribution model rather than claiming 100% of sales came from one campaign.
What is the difference between ROI and payback period?
ROI measures the size of a return relative to the investment cost — what percentage you gained or lost. Payback period measures how long it takes to recover the initial investment through cash flows — how quickly you get your money back. A project with a high ROI might have a long payback period if the returns come later. A project with a short payback period might have a modest ROI if returns slow after the initial recovery. Use both together for capital investment decisions: payback period for cash flow planning, ROI for profitability comparison.
How do I calculate ROI on a stock investment?
Include all costs (purchase price plus brokerage fees) and all returns (sale proceeds plus any dividends received, minus sale fees). Formula: Stock ROI = ((Sale Proceeds + Dividends − Purchase Price − All Fees) ÷ (Purchase Price + Purchase Fees)) × 100. For multi-year stock holdings, calculate annualised ROI to compare performance against market benchmarks on an annual basis.
Can I use this ROI calculator for any type of investment?
Yes — the ROI formula works for any investment: stocks, real estate, marketing campaigns, business tools, equipment purchases, training, or any other expenditure where you can measure the return. The key requirement is being able to accurately measure both the total cost and the total return. For investments with ongoing costs and returns (rental properties, subscription software), calculate on an annual basis and compare annual ROI figures.
How is ROI different from profit margin?
ROI compares profit to the cost of the investment — it measures return relative to what you spent. Profit margin compares profit to revenue — it measures how much of every dollar of revenue you keep as profit. Example: You invest $1,000 and generate $1,400 in revenue with $1,000 in total costs. ROI = ($400 ÷ $1,000) × 100 = 40%. Profit margin = ($400 ÷ $1,400) × 100 = 28.6%. ROI is more useful for evaluating whether an investment was worthwhile; profit margin is more useful for measuring business efficiency and pricing decisions.