Understand the numbers
ROI is a simple way to compare the result of an investment with what it cost. This calculator combines the initial investment and additional costs, then compares that total cost with the return or ending value you enter.
Calculation method
Net profit or loss equals total return minus total cost. ROI equals net profit or loss divided by total cost, expressed as a percentage. The calculator also provides a return multiple and an annualized estimate when a time period is supplied.
Example
Example: a project that costs $10,000 in total and returns $12,500 produces $2,500 of net profit before taxes and other unentered costs, which equals a 25% simple ROI.
Useful checks
- Include all meaningful costs rather than only the purchase price.
- Compare ROI with the time required to earn it.
- Use annualized ROI carefully because real returns may not compound evenly.