ROI Calculator - Calculate Return on Investment Online

Calculate your Return on Investment (ROI) quickly with our free online ROI calculator. Enter cost and return values to get the ROI percentage and net profit instantly.

Cost of Investment

Return from Investment

Examples:

Understanding Return on Investment (ROI)

Return on Investment (ROI) is one of the most widely used financial metrics for evaluating the profitability of an investment. It tells you how much money you made (or lost) relative to what you put in, expressed as a percentage.

ROI is universal - you can use it to compare stocks, real estate, business ventures, education, marketing campaigns, or any situation where you invest resources expecting a return. A positive ROI means profit; negative means loss.

The ROI Formula

ROI = ((Return - Cost) / Cost) × 100%

Or equivalently:

ROI = (Net Profit / Cost) × 100%

ROI = ((Final Value - Initial Cost) / Initial Cost) × 100%

Positive ROI

Return > Cost. You made money. The investment was profitable.

Zero ROI

Return = Cost. You broke even. No gain, no loss.

Negative ROI

Return < Cost. You lost money. The investment lost value.

Worked Examples

Example 1: Stock Investment Gain

You bought shares for $10,000 and sold them for $12,500. What's your ROI?

Cost = $10,000

Return = $12,500

Net Profit = $12,500 - $10,000 = $2,500

ROI = ($2,500 / $10,000) × 100 = 25%

Your investment returned 25%

Example 2: Real Estate Investment

You bought a property for $250,000 and sold it for $325,000. Calculate ROI.

Cost = $250,000

Return = $325,000

Net Profit = $325,000 - $250,000 = $75,000

ROI = ($75,000 / $250,000) × 100 = 30%

30% return on your real estate investment

Example 3: Investment Loss

You invested $50,000 in a business that's now worth $45,000. What's your ROI?

Cost = $50,000

Return = $45,000

Net Profit = $45,000 - $50,000 = -$5,000

ROI = (-$5,000 / $50,000) × 100 = -10%

You've lost 10% of your investment

Example 4: Comparing Two Investments

Investment A: Cost $5,000, Return $8,500. Investment B: Cost $20,000, Return $28,000. Which performed better?

Investment A: ROI = ($3,500/$5,000) × 100 = 70%

Investment B: ROI = ($8,000/$20,000) × 100 = 40%

Investment A had better ROI (70% vs 40%)

But B made more absolute profit ($8,000 vs $3,500)

Example 5: Doubling Your Money

What ROI do you get if you double your investment?

Cost = $100,000

Return = $200,000

Net Profit = $100,000

ROI = ($100,000 / $100,000) × 100 = 100%

Doubling your money = 100% ROI

Quick Fact

Warren Buffett's Berkshire Hathaway has achieved an average annual ROI of about 20% since 1965 - nearly double the S&P 500's historical average of ~10%. Over 55+ years, this compound growth turned $19 per share in 1965 into over $500,000 per share today. This demonstrates the power of consistent positive ROI over time.

Frequently Asked Questions

What's a good ROI?

It depends on the investment type and risk. Stock market averages ~10% annually. Real estate might return 8-15%. Business investments vary wildly. Generally, higher risk should mean higher expected ROI. Compare your ROI to relevant benchmarks and consider the time period.

Does ROI account for time?

Basic ROI doesn't consider how long the investment took. A 20% return in 1 year is better than 20% in 5 years. For time-adjusted returns, use Annualized ROI or Internal Rate of Return (IRR). Annualized ROI = (1 + ROI)^(1/years) - 1.

What's the difference between ROI and profit margin?

ROI measures return relative to investment cost. Profit margin measures profit relative to revenue. ROI = Profit/Cost. Profit Margin = Profit/Revenue. They answer different questions about business performance.

Should I include fees and taxes in ROI calculations?

For accurate personal ROI, yes - include all costs (fees, commissions, taxes) in your cost basis, and use after-tax returns. For comparing investment performance before taxes, use pre-tax figures. Just be consistent when comparing.

Can ROI be more than 100%?

Absolutely! If you invest $1,000 and get back $5,000, your ROI is 400%. Some investments (like successful startups or cryptocurrencies) can have ROI in the thousands of percent. Conversely, maximum loss is -100% (losing everything).

How is ROI used in business decisions?

Companies use ROI to evaluate projects, marketing campaigns, equipment purchases, and acquisitions. If a project's expected ROI exceeds the company's cost of capital, it's typically worth pursuing. ROI helps prioritize limited resources across competing opportunities.

Other Free Tools

Search tools