ROI Calculator
Enter your total investment and the value returned to calculate ROI percentage, net profit, investment multiple and annualised return over any holding period.
Enter your total investment and the value returned to calculate ROI percentage, net profit and investment multiple. Optionally annualise the result over a holding period.
Formula
ROI (%) = (Gain − Investment) ÷ Investment × 100 | Annualised ROI = (1 + ROI)^(12/months) − 1
ROI measures net return as a percentage of the initial investment. Annualised ROI converts a period return into an equivalent annual rate, allowing comparison across investments of different durations.
Worked Example
$10,000 invested in a marketing campaign; total revenue generated: $14,500 over 8 months.
Net profit = $14,500 − $10,000 = $4,500
ROI = $4,500 ÷ $10,000 × 100 = 45%
Investment multiple = $14,500 ÷ $10,000 = 1.45×
Annualised ROI = (1 + 0.45)^(12/8) − 1 = 70.0%
The annualised figure lets you compare this 8-month campaign against a 12-month investment that returned a lower nominal ROI.
FAQ
Frequently Asked Questions
Use this in your workflow
After calculating ROI, use the Payback Period Calculator to find how long until the investment recovers its cost. Model the loan cost for the investment with the Business Loan Calculator. Browse all Free Business Calculators.
Worked example: marketing campaign ROI
A useful starting point before entering your own figures above.
| Item | Value |
|---|---|
| Total investment (campaign cost) | £8,000 |
| Total value returned (attributed revenue) | £22,000 |
| Net profit (return − investment) | £14,000 |
| ROI | 175% |
| Investment multiple | 2.75× |
| Annualised ROI (campaign ran 8 months) | ~262% p.a. |
Interpretation: every £1 spent on the campaign returned £2.75. An ROI of 175% over 8 months is strong for digital marketing — compare against your cost of capital and alternative uses of the £8,000 to decide whether to repeat.
Limitations
ROI does not account for risk, timing of cash flows, or the cost of capital. It treats a 100% return in one year the same as a 100% return over ten years — use annualised ROI to normalise for time. For capital-intensive decisions, supplement this with NPV (Net Present Value) or IRR (Internal Rate of Return). These results are for planning purposes only — not financial advice.
When to use this calculator
- →Evaluating whether a marketing campaign or project delivered acceptable returns
- →Comparing two investment opportunities on a like-for-like annual basis
- →Building a business case or investment memo with clear return metrics
- →Reporting marketing ROI or project ROI to stakeholders
Frequently asked questions
What is ROI and how is it calculated?
ROI (Return on Investment) measures the gain or loss from an investment relative to its cost. Formula: ROI = (Gain − Investment) ÷ Investment × 100. A 45% ROI means every $1 invested returned $1.45 — a $0.45 net gain.
What is a good ROI?
It depends on the investment type and risk. A 10% annual ROI is considered solid for stock market investments. Marketing campaigns often target 300%+ ROI. Property development typically targets 15–25%. Always compare against the cost of capital and alternatives.
What is the difference between ROI and annualised ROI?
ROI is the total return over the investment period regardless of duration. Annualised ROI converts the return into an equivalent yearly rate, allowing fair comparison. A 50% ROI in 6 months is far better than a 50% ROI over 3 years.
Can ROI be negative?
Yes. A negative ROI means the investment lost money. Example: $10,000 invested, $7,000 returned = ROI of −30%. This is a loss of $3,000, or 30 cents on every dollar invested.
What is an investment multiple?
The investment multiple (also called MOIC) shows the total value returned per dollar invested. A 1.45× multiple means $1 invested returned $1.45. A 1.0× multiple means you broke even. Below 1× is a loss.
Does ROI account for time or risk?
Standard ROI does not. Annualised ROI accounts for time. Neither accounts for risk. For decisions with uncertain cash flows, supplement with NPV (Net Present Value) or IRR (Internal Rate of Return).