ROI Calculator

Return on Investment (ROI) is one of the most widely used metrics in business and personal finance. It measures how much profit or return you received relative to the cost of an investment. A positive ROI means you made money; a negative ROI means you lost money.

ROI can be applied to virtually any financial decision: a stock purchase, a real estate deal, a marketing campaign, or even a college education. The formula is deliberately simple — profit divided by cost — which makes it easy to compare wildly different investment types on the same scale.

One important limitation: basic ROI ignores the time dimension. A 50% ROI sounds better than a 30% ROI, but if the 50% took five years and the 30% took one year, the 30% is actually far superior on an annualized basis. That's why this calculator also shows you annualized ROI, which accounts for how many years the investment ran.

For business applications, ROI helps you prioritize initiatives. Should you spend $20,000 on paid ads or a new hire? Which product line generates the most return per dollar invested? ROI gives you a common currency for comparing these decisions.

For personal investing, use ROI alongside other metrics like risk-adjusted return (Sharpe ratio) and liquidity. A 15% ROI on a private business investment carries very different risk than a 10% return from an S&P 500 index fund, even though the numbers look similar.

Tips for accurate ROI: Always include ALL costs — purchase price, transaction fees, maintenance, taxes, opportunity cost of capital. The most common mistake is forgetting indirect or hidden costs, which can turn a seemingly profitable investment into a mediocre or losing one.