What is ROI?
Calculating ROI: Return on Investment (ROI) measures profitability of investments. Calculating ROI helps businesses evaluate performance, compare investments, and make data-driven decisions. Our ROI calculator simplifies financial analysis, enabling quick comparison of different investment opportunities. Understanding ROI is crucial for optimizing marketing budgets, assessing business ventures, and improving financial planning.
ROI Calculator
ROI Formula
ROI = [(Final Value - Initial Investment) / Initial Investment] × 100
How to Use
Enter initial investment amount and final return value. Click calculate to get instant ROI percentage. Our calculator automatically computes returns, showing net profit and ROI ratio. Use clear button to reset values. Track multiple investments by comparing different scenarios. Suitable for real estate, stock market, business projects, and marketing campaigns.
Calculation Process
| Step | Description |
|---|---|
| 1 | Subtract initial investment from final value |
| 2 | Divide result by initial investment |
| 3 | Multiply by 100 to get percentage |
Advantages & Disadvantages
- Advantages: Simple metric, Universal application, Quick comparison tool, Measures efficiency, Identifies profitable investments
- Disadvantages: Ignores time factor, No risk consideration, Doesn't account for inflation, Limited to financial returns, Short-term focus
FAQs
What is a good ROI percentage?
A good ROI typically exceeds 10-15%, but varies by industry. Consider investment duration and risk factors when evaluating ROI percentages.
Can ROI be negative?
Yes, negative ROI indicates loss. It occurs when final value is less than initial investment.