Return on Investment (ROI) Calculator
Measure profitability, calculate capital efficiency, and determine annualized returns across business ventures, ad campaigns, and real estate.
Frequently Asked Questions
What is the formula to calculate Return on Investment (ROI)?
The standard ROI formula is: ROI (%) = ((Final Value of Investment - Initial Cost of Investment) / Initial Cost of Investment) * 100. Net Profit equals Final Value minus Initial Cost.
What is Annualized ROI and why is it important?
Annualized ROI accounts for the holding duration of an asset, allowing you to accurately compare investments held over different time periods (e.g. a 30% return over 1 year is vastly superior to a 30% return over 5 years).
What is considered a good ROI in business and marketing?
In digital marketing and paid advertising, a 5:1 ratio (500% ROI) is widely considered strong. For stock market investments, an annualized return of 7% to 10% (matching the historical S&P 500 average) is the baseline benchmark.