Calculate return on investment and net profit.
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How do you calculate return on investment (ROI)?
ROI = (final value − initial investment) ÷ initial investment × 100, and net profit = final − initial. For example, investing 1,000 and ending with 1,500 is a 50% ROI and a 500 profit. ROI ignores how long the investment took, so compare time periods carefully when judging returns.
Understanding your result
ROI ignores how long the investment took; compare time periods carefully.
Formula and method
ROI = (final value − initial investment) ÷ initial investment × 100. Net profit = final − initial.
Assumptions and limitations
ROI ignores how long the investment took and the risk involved. Compare investments over the same time horizon, and use annualised returns for long periods.
Worked example
Investing 1,000 and ending with 1,500 is a 50% ROI and a 500 profit.
How it compares
| Metric | ROI | ROAS |
|---|---|---|
| Measures | Profit vs cost | Revenue vs ad spend |
| Accounts for costs | Yes | No (revenue only) |
| Best for | Overall profitability | Ad efficiency |
How to use this tool
- Enter the initial investment.
- Enter the final value or total return.
Common mistakes to avoid
- Comparing ROI across very different time horizons.
About the ROI Calculator
Measure how profitable an investment was as a percentage of what you put in.
Who should use this tool
Investors, marketers and business owners who want to measure the profitability of any spend or investment.
Benefits
- Express profit as a clear, comparable percentage.
- Compare the payoff of different investments.
- See net profit alongside the percentage.
Practical use cases
- Evaluating a marketing campaign or project.
- Comparing two investment options.
- Reporting returns to stakeholders.
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Frequently asked questions
Can ROI be negative?
Yes. A final value below the investment gives a negative ROI (a loss).
Why should I compare ROI over the same time period?
ROI measures total gain relative to cost but ignores how long the money was invested. A 50% return over one year is very different from 50% over five years. When comparing options, align the time frames or convert to an annualised figure for a fair comparison.
What counts as the initial investment?
Ideally the initial investment includes every cost you incurred to obtain and hold the asset, not just the purchase price. Leaving out fees, commissions or associated expenses overstates the return, so include them where you can for a figure that reflects your true outlay.