How to calculate ROI
- Enter how much you invested and what you got back, for example the final value of an investment or the extra profit a project produced.
- Add any extra costs, such as fees, setup costs or your own time valued in money, so they are included in the investment.
- Add the number of years to see the annualised return, which lets you compare investments of different lengths. Use "Compare two options" to put two choices side by side.
ROI and annualised ROI
Return on investment is net profit divided by the cost of the investment: invest 10,000, get back 13,500, and the ROI is 3,500 ÷ 10,000 = 35%. It is the simplest way to compare marketing campaigns, equipment purchases, training, property or any decision where money goes in and value comes out.
Plain ROI ignores time, which can be misleading: 35% over two years is about 16.2% a year, while 32% in one year is better. The annualised figure here is the compound annual growth rate (CAGR): (final ÷ initial)^(1 ÷ years) − 1. For investments with several cash flows over time, such as monthly contributions or rental income, a calculation like IRR or NPV is more accurate. Also remember what ROI leaves out: risk, the effort involved and the return you could have earned elsewhere. Count all costs honestly, including your own hours, and the comparison will be much more useful. Everything is calculated in your browser.
What is the ROI formula?
ROI = (amount returned − total cost) ÷ total cost × 100.
What is a good ROI?
It depends on risk and time. Stock markets have historically returned roughly 7–10% a year on average; marketing campaigns often aim for several times their cost.
How is marketing ROI calculated?
Use the gross profit generated by the campaign, not total revenue, as the return, and the full campaign cost as the investment.