Business Calculator
ROI Calculator
Estimate your return on investment, net profit, return multiple, and annualized return based on the amount invested and the total value received.
Investment Details
Enter the original investment, the total value returned, and how long the investment was held.
What These Results Mean
Net profit is the amount gained or lost after subtracting the original investment from the total return.
ROI shows the percentage gain or loss relative to the amount originally invested.
Return multiple compares the total return directly with the original investment.
Annualized return estimates the average yearly compounded return over the holding period.
ROI Formula
Net Profit = Total Return − Initial Investment
ROI = Net Profit ÷ Initial Investment × 100
Return Multiple = Total Return ÷ Initial Investment
Annualized Return accounts for the length of time the investment is held and expresses the return as an average yearly compounded rate.
How to Use the ROI Calculator
Start by entering the amount originally invested in the business, project, asset, or opportunity you want to evaluate.
Next, enter the total amount returned from the investment. This should represent the value received or expected at the end of the period being analyzed.
Then enter the number of years the investment is held. This allows the calculator to estimate an annualized return in addition to total ROI.
The calculator will estimate net profit, total return on investment, return multiple, and annualized return.
You can adjust the investment amount, total return, and holding period to compare different scenarios.
ROI Example
Suppose you invest $50,000 in a business or project and receive a total return of $65,000 after three years.
The net profit would be $15,000 because the total return exceeds the original investment by that amount.
Dividing the $15,000 profit by the $50,000 investment produces an ROI of 30%. The total return is also equal to 1.30 times the original investment.
Because the investment was held for three years, the calculator also converts the total return into an estimated annualized return, which is approximately 9.1% per year in this example.
Frequently Asked Questions
What does ROI mean?
ROI stands for return on investment. It measures the gain or loss from an investment relative to the amount originally invested.
How is ROI calculated?
ROI is calculated by subtracting the original investment from the total return, dividing the result by the original investment, and multiplying by 100.
What is a return multiple?
Return multiple compares the total return directly with the original investment. For example, a return multiple of 1.5x means the total return is one and a half times the amount originally invested.
What is annualized return?
Annualized return estimates the compounded yearly rate that would produce the same total return over the holding period. This can make it easier to compare investments held for different lengths of time.
Can ROI be negative?
Yes. If the total return is less than the original investment, the investment has lost value and the calculated ROI will be negative.
Does ROI include taxes, financing, or cash flow timing?
Not automatically. This calculator uses the investment amount, total return, and holding period you enter. Taxes, financing costs, fees, interim cash flows, and other factors may need to be considered separately for a more detailed analysis.
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