ROI Calculator Guide Guide
How to Use
- 1Enter the **Investment Amount** (total cost of the investment).
- 2Enter the **Returned Amount** (total value received from the investment).
- 3Alternatively, enter the **Net Profit** directly if known.
- 4Click calculate to see your **Return on Investment (ROI)** percentage.
Formula & Logic
Return on Investment (ROI) is a performance measure used to evaluate the efficiency of an investment. It measures the amount of return on an investment relative to its cost.
Practical Applications
Business Investments
Evaluate the profitability of purchasing new equipment, marketing campaigns, or hiring new staff.
Stock Market
Calculate the percentage gain or loss on a stock trade relative to the capital invested.
Real Estate
Determine the return on a rental property purchase by comparing rental income and appreciation against purchase price and expenses.
Frequently Asked Questions
Q.What is a good ROI?
A 'good' ROI depends on the risk and time horizon. For stocks, 7-10% annually is often considered good. For business projects, companies might target 15-20%+. There is no single universal benchmark.
Q.Can ROI be negative?
Yes, a negative ROI indicates a net loss on the investment. It means the total costs exceeded the total returns generated.
Q.Does ROI account for time?
Standard ROI does not account for the time period of the investment. A 20% ROI over 1 year is much better than a 20% ROI over 5 years. For time-weighted returns, use Annualized ROI or CAGR.