ROI Calculator

This free ROI calculator — a complete return on investment calculator and investment return calculator in one — works out your return, net profit and payback period in seconds. Enter your revenue and cost for a one-time investment, or use the periodic mode for monthly cash flow. It also doubles as a net profit calculator, showing the exact gain or loss alongside the percentage return.

What Is ROI (Return on Investment)?

ROI (Return on Investment) is the universal financial metric that expresses how much profit an investment generates as a percentage. It is one of the most widely used indicators by businesses, investors and marketers for evaluating investment decisions. A positive ROI means the investment made money; a negative ROI means it lost money.

How to Calculate ROI? Formula and Example

Here is how to calculate ROI with the simple ROI formula:

ROI = ((Revenue Earned − Total Investment Cost) ÷ Total Investment Cost) × 100

Example: you spent $40,000 on a marketing campaign and it generated $100,000 in revenue.

• Net Profit = $100,000 − $40,000 = $60,000
• ROI = ($60,000 ÷ $40,000) × 100 = 150%

A 150% ROI means you earned $1.50 of profit for every $1.00 invested. Enter revenue and cost in the Basic ROI mode to calculate this instantly.

ROI Rating Benchmarks

Digital marketing campaigns often see 50–200% ROI; stock markets have historically averaged about 7–10% annually. Real estate must factor in both rental yield and capital appreciation.

Periodic ROI and Payback Period Calculator

As a payback period calculator, the Periodic ROI mode is built for investments with a regular monthly income stream (rental property, SaaS subscription, franchise, e-commerce store etc.). Two key outputs are calculated:

• Period ROI: Total return over the specified number of months.
• Payback Period: How many months it takes for monthly net income to fully recover the initial investment. Formula: Payback Period = Initial Investment ÷ Monthly Net Profit.

Example: a $120,000 franchise investment earning $12,000 net profit per month has a payback period of 10 months. The 24-month ROI = ((12,000 × 24 − 120,000) ÷ 120,000) × 100 = 140%.

ROI vs ROAS

ROAS (Return on Ad Spend) uses only ad spend as the cost base. ROI includes all costs — product, staff, infrastructure, advertising. Use ROAS for campaign optimisation; use ROI for overall business profitability. The best investment decisions use both together.

Common ROI Calculation Mistakes

• Underestimating costs: Include labour, depreciation and overhead, not just direct costs — otherwise ROI appears higher than reality.
• Using gross revenue: Deduct returns, discounts and platform commissions to get net revenue before entering it.
• Ignoring the time dimension: A 60% ROI in one month vs three years has very different implications. Use Annual ROI for fair comparisons.
• Not accounting for inflation: In long-term investments, real (inflation-adjusted) ROI is more meaningful than nominal ROI.

Annual ROI: Comparing Different Periods Fairly

Annual ROI normalises results so you can compare investments of different lengths on the same basis. Formula: Annual ROI = (Period ROI ÷ Analysis Period [months]) × 12. Example: a 6-month campaign with 90% ROI has an annual ROI of 180%; an 18-month investment with 180% ROI has an annual ROI of 120%. Despite the higher total ROI, the longer investment delivers a lower annual return. The Periodic ROI mode calculates annual ROI automatically.

What Is a Good ROI?

There is no single "good" number — a healthy ROI depends on the asset class, the risk and the time involved. Still, some rough benchmarks help you judge a result:

The key is to compare like with like: always annualise returns before ranking investments, factor in the risk, and remember that a high ROI over a very short period may not be repeatable. Run your figures through this ROI calculator, then weigh the result against the payback period and your own risk tolerance before deciding.

What ROI Does Not Tell You

ROI is powerful because it reduces an investment to a single, comparable percentage — but that simplicity hides several things you should consider separately:

• Time: a 50% ROI is excellent in one year and mediocre over ten. Always check the annualised figure, not just the headline ROI.
• Risk: two investments can show the same ROI while one is far riskier. ROI says nothing about the chance of loss.
• Cash-flow timing: money returned early is worth more than money returned late; ROI treats them the same, so pair it with the payback period.
• Hidden costs: taxes, fees and inflation can turn a positive nominal ROI into a smaller real return — include every cost in the investment figure.

For a complete picture, use this tool's ROI, annualised ROI and payback period together rather than relying on one number alone. See the frequently asked questions below for more worked examples.