ROI Calculator

Calculate Return on Investment β€” the simplest and most universal metric for evaluating the profitability of any investment or business decision.

RETURN ON INVESTMENT

50%

NET PROFIT

$50.00K

TOTAL GAIN

$1.50L

COST

$1.00L

πŸ’‘ ROI: The Universal Performance Measure

Return on Investment (ROI) measures the percentage gain or loss on an investment relative to its cost. The formula is: ROI = (Net Profit Γ· Investment Cost) Γ— 100. A positive ROI means the investment generated more than it cost; a negative ROI means it lost money.

ROI is universally applicable β€” it works for stocks, real estate, business projects, marketing campaigns, education, and any other capital allocation decision. The key limitation is that basic ROI does not account for the time dimension. A 50% ROI in 1 year is vastly better than 50% ROI over 10 years. For time-adjusted comparisons, use annualized ROI or CAGR.

Invested $100K, returned $150K β†’ ROI = 50%. But context matters: 50% in 6 months = exceptional (100% annualized). 50% over 5 years = 8.4% CAGR β€” merely average for equity markets.

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