ROI Calculator: Measuring the Success of Your Investments

In the world of business and finance, Return on Investment (ROI) is the ultimate metric. It answers the most fundamental question for any investor: "For every dollar I put in, how much did I get back?" This ROI Calculator provides a clear percentage of your profit or loss, helping you compare different opportunities with ease.

1. The ROI Formula

ROI is calculated by subtracting the initial cost of the investment from its final value, then dividing that result by the initial cost: ROI = (Gain from Investment - Cost of Investment) / Cost of Investment

While ROI is a snapshot, for long-term wealth building, you should focus on the power of Compound Interest and consistent Investment strategies.

2. ROI for Businesses

Businesses use ROI to evaluate the success of marketing campaigns, equipment purchases, and new product launches. To ensure your ROI leads to actual bottom-line growth, always monitor your Margin and factor in taxes using our VAT Calculator.

3. FAQ

Q: What is a "Good" ROI? A: It depends on the risk. A 7-10% ROI in the stock market is considered solid. A business project might target 20% or more to account for higher risk and labor costs.

Q: What is the difference between ROI and Annualized ROI? A: Total ROI tells you how much you made overall. Annualized ROI tells you how much you made per year, which is better for comparing a 1-year investment to a 5-year investment.

Conclusion

Don't let complicated spreadsheets hide your performance. Use this tool to get a clear, mathematical view of your returns today.