A free ROI calculator online for any investment
Every purchase a business makes is really a question: will this bring back more than it cost? A new machine, a marketing campaign, a training course, a rental property, a batch of shares. Return on investment is the number that answers it, and it works the same way for all of them.
This ROI calculator online gives you that answer in a second. Enter what you put in and what you got back, and you get ROI as a percentage, your net profit and the return as a multiple. Add the holding period and you also get the annualised return, which is the only fair way to compare a three-month project with a five-year one. There's a dedicated marketing mode that works from revenue and gross margin, and a comparison table that ranks several options at once.
It's free, needs no sign-up, and runs entirely in your browser, so nothing you type is sent anywhere.
How to use the ROI calculator
- Pick a modeSimple ROI for a straight in-and-out calculation, ROI over time when you want the annualised return, or Marketing ROI when you're measuring a campaign.
- Enter what you investedInclude everything: the purchase price, fees, installation, training and any other cost you wouldn't have paid otherwise.
- Enter what you got backThe sale value, total income or, for a marketing campaign, the revenue the work produced.
- Add the time periodYears, months or days. The calculator then shows the annualised return and compares it with a benchmark rate you set, such as a fixed deposit.
- Compare your optionsUse the table at the bottom to line up several investments. It sorts by annualised ROI and marks the winner.
What is ROI?
ROI stands for return on investment. It measures the profit an investment produced as a percentage of what it cost:
ROI = (Amount returned − Amount invested) ÷ Amount invested × 100
Turn 100,000 into 150,000 and you made a profit of 50,000 on a cost of 100,000, so the ROI is 50%. The beauty of the formula is that it's scale-free: a 50% return is 50% whether you invested a thousand or a crore, which makes very different opportunities directly comparable.
ROI can be negative. If an investment of 100,000 returns only 70,000, the ROI is −30%: you lost 30% of what you put in.
Annualised ROI, and why it matters
Plain ROI ignores time completely, and that makes it easy to fool yourself. A 40% return sounds great until you learn it took six years to arrive. Annualised ROI, also called CAGR (compound annual growth rate), converts any return into the steady yearly rate that would produce the same result:
Annualised ROI = ((Return ÷ Investment)1/years − 1) × 100
| Investment | Total ROI | Time | Annualised |
|---|---|---|---|
| A | 40% | 6 years | 5.8% a year |
| B | 25% | 1 year | 25% a year |
| C | 12% | 3 months | 57% a year |
On raw ROI, A looks best. On annualised return, it's the worst of the three and barely beats a bank deposit. Whenever you compare investments of different lengths, use the annualised column.
Worked examples
Shares held for three years
Invested 100,000 · Sold for 175,000 · 3 years
Net profit is 75,000, so ROI is 75%. Annualised, that's about 20.5% a year, comfortably ahead of an 8% benchmark. Every 1 invested came back as 1.75.
New equipment for a business
Machine 400,000 + installation 50,000 · Extra profit 180,000 a year
Total investment is 450,000. Over three years the machine generates 540,000 in extra profit, an ROI of 20% and a payback period of two and a half years. The shorter the payback, the less risk you carry if demand changes.
A marketing campaign
Revenue 500,000 · Gross margin 45% · Marketing cost 120,000
Gross profit is 225,000. Subtract the 120,000 spent and the campaign made 105,000, an ROI of 87.5%. Note how different this is from ROAS, which would report a flattering 4.17x on the same numbers.
ROI vs. ROAS vs. payback period
| Metric | What it measures | Best used for |
|---|---|---|
| ROI | Profit as a percentage of total cost | Deciding whether something was worth doing |
| ROAS | Revenue as a multiple of ad spend | Comparing campaigns and channels day to day |
| Annualised ROI / CAGR | Yearly rate of return | Comparing investments held for different periods |
| Payback period | Time to recover the original cost | Judging risk and cash-flow pressure |
| Net profit | Money left in absolute terms | Reality check; percentages hide small numbers |
If you run paid advertising, our ROAS calculator handles the channel-level view, while this page answers the bigger question of whether the money came back.
What counts as a good ROI?
There's no single benchmark, because ROI has to be judged against three things: time, risk and the alternative.
- Time. Always convert to an annual rate before you judge. 30% over five years is about 5.4% a year.
- Risk. A guaranteed deposit at 7% and a startup investment at 25% are not comparable. Higher expected returns exist because more of those investments fail.
- The alternative. The real question is never "is 12% good?" but "is 12% better than what else I could do with this money?" That alternative is your opportunity cost, and it's what the benchmark field is for.
A useful rule: an investment should beat your safe alternative by enough to pay you for the risk and the hassle. If it doesn't, the safe option wins.
Costs people forget to include
Most overstated ROI figures come from an incomplete cost side. Before you calculate, check whether you've counted:
- Fees, commissions, brokerage and taxes on the sale.
- Setup, installation, delivery and training.
- Ongoing costs: maintenance, subscriptions, hosting, insurance.
- Staff time, which is real money even when no invoice is issued.
- Costs of failure: returns, refunds, write-offs and bad debt.
- The opportunity cost of capital tied up for the whole period.
Simple test: if you wouldn't have paid it had you not made this investment, it belongs in the cost.
The limits of ROI
ROI is a ratio, not a full picture. Four things it cannot tell you:
- Risk. Two investments with identical ROI can have completely different chances of going wrong.
- Inflation. A 6% return in a year when prices rose 6% left you exactly where you started in real terms.
- Scale. A 200% ROI on 5,000 is 10,000 of profit. A 15% ROI on 10 lakh is 150,000. The smaller percentage is worth far more.
- Timing of cash flows. Money returned early is worth more than money returned late, which is why finance teams also use NPV and IRR for big projects.
For everyday decisions, ROI plus annualised return plus payback period covers almost everything you need.
How to improve ROI
- Cut the cost base first. Negotiating 10% off the purchase price improves ROI immediately and with certainty, unlike hoped-for extra revenue.
- Shorten the payback. Getting the same return sooner raises the annualised figure and lowers your risk.
- Raise margins, not just revenue. On a 20% margin, an extra 100,000 in sales adds only 20,000 of profit.
- Kill the losers quickly. The money already spent is gone; the only question is whether future spending will return more than it costs.
- Measure before you commit. Run a small test, calculate the ROI on that, and scale only what works.
ROI in different situations
Business equipment and software
The cost is easy to find and the return usually shows up as time saved or extra output. Convert the saving into money before you calculate: two hours a week saved at 500 an hour is roughly 52,000 a year. Include training and the disruption of switching, because both are real.
Marketing campaigns
Use gross profit rather than revenue, which is what the Marketing ROI mode above does. A campaign generating 500,000 in sales at a 45% margin produced 225,000 of gross profit, and that is what has to beat the cost. This is also why marketing ROI and ROAS give such different impressions of the same campaign.
Property
Property ROI has two parts: rental income and capital growth. Count stamp duty, registration, brokerage, repairs, property tax and vacant months, and remember that money is locked up for years, so the annualised figure matters far more than the headline gain.
Stocks and mutual funds
Include brokerage and taxes, and use annualised ROI so you can compare a fund held for eight years with one held for eighteen months. Dividends count as part of the return.
Training and hiring
Harder to measure, but not impossible. For a hire, compare the fully loaded cost with the revenue or savings they generate. For training, look at a measurable outcome such as faster delivery or fewer errors, and accept that the figure will be an estimate rather than an exact number.
Payback period: the other number to know
ROI tells you how much came back. Payback period tells you how long it took to get your money back, and the two together tell a much fuller story. An investment of 450,000 that returns 180,000 a year has a payback period of two and a half years.
Short paybacks reduce risk. If the market shifts, a project that repays itself in eight months has already done its job, while one that needs five years is exposed to everything that might change in between. Many businesses set a maximum payback period alongside a minimum ROI, and reject anything that fails either test.
The exception is investments with long, dependable returns, such as property or infrastructure, where a longer payback is normal and accepted. The question to ask is whether you can comfortably wait that long without needing the cash.
Frequently asked questions
What is ROI?
ROI stands for return on investment. It measures how much profit an investment produced compared with what it cost, expressed as a percentage of the amount invested.
How do you calculate ROI?
Subtract the amount invested from the amount returned, divide by the amount invested and multiply by 100. Turning 100,000 into 150,000 is an ROI of 50%.
What is a good ROI?
It depends on the time taken, the risk and your alternatives. A 20% return over five years is worse than a bank deposit; the same 20% in three months is excellent. Always compare annualised figures.
What is annualised ROI?
Annualised ROI, also called CAGR, is the steady yearly rate that would turn your starting amount into the final amount over the same period. It lets you compare investments held for different lengths of time.
What is the difference between ROI and ROAS?
ROAS compares revenue with ad spend only and is shown as a multiple. ROI compares profit with total cost and is shown as a percentage, so it reflects whether you actually made money.
Can ROI be negative?
Yes. A negative ROI means the investment returned less than it cost. An ROI of -30% means you lost 30% of the money you put in.
Does ROI account for inflation and risk?
No. ROI is a simple ratio. Two investments with the same ROI can carry completely different risk, and inflation quietly reduces the real value of any return, so use ROI alongside other measures.
Is my data saved anywhere?
No. Every calculation runs in your browser, so the figures you enter never leave your device.
Run your numbers
Before the next big purchase or campaign, spend a minute on the maths. Go back to the ROI calculator online, enter your figures, and see what the investment really returns.