ROI Calculator

Return on investment as a percentage and annualised figure.

Overview

Calculates the percentage Return on Investment and annualized profitability of business ventures, marketing campaigns, or asset purchases.

Formula & Calculation Method

ROI (%) = [(Net Profit) / Cost of Investment] × 100

Net profit equals final investment gain minus total invested expenses.

Worked Example: ₹3,00,000 Investment Sold for ₹4,20,000

Inputs: Cost of Investment = ₹3,00,000 | Final Proceeds = ₹4,20,000

  • Net Profit = ₹4,20,000 - ₹3,00,000 = ₹1,20,000
  • ROI Ratio = 1,20,000 / 3,00,000 = 0.40
  • ROI Percentage = 0.40 × 100 = 40.0%

Summary: Total Cost = ₹3,00,000 | Net Gain = ₹1,20,000 | Total ROI = 40.0%

Common Use Cases

  • Marketing Campaign Evaluation: Measure customer acquisition revenues against digital ad spend.
  • Equipment Purchases: Assess commercial machinery efficiency against operational cost savings.
  • Real Estate Flipping: Calculate net percentage returns after accounting for renovation and registration expenses.

Frequently Asked Questions

How does annualized ROI differ from simple ROI?

Annualized ROI divides total ROI by the number of holding years, accounting for the compounding duration.

What is a healthy ROI benchmark?

Benchmarks vary by risk: broad equity markets average 10-14%, while high-risk venture capital targets 25%+.

Can ROI be negative?

Yes, if your exit proceeds are lower than total costs, ROI reflects a net loss.

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