ROI Calculator

ROI (Return on Investment) is an roi metric that measures the profitability of an investment as a percentage of its cost. It is calculated using the roi formula: (Net Return ÷ Investment Cost) × 100. A positive result means profit; a negative result means a loss. All roi figures from this calculator are for illustrative purposes only.

A good ROI depends on context. For stock market investments, 7–10% annually is generally considered healthy. For marketing roi, a 5:1 return (500% ROI) is considered strong — meaning £5 revenue for every £1 spent. For business projects, anything above your cost of capital is positive. High roi opportunities typically carry higher risk, so always compare investments on a risk-adjusted basis.

The roi formula is: ROI = ((Final Value − Investment Cost) ÷ Investment Cost) × 100. Example: you spend £5,000 on a marketing roi campaign and generate £20,000 in revenue. Net return = £15,000. ROI = (£15,000 ÷ £5,000) × 100 = 300%. This works for any type of investment — real estate, stock market positions, equipment, or marketing spend. Enter your figures into this investment calculator and the result appears instantly.

ROI and rate of return both measure investment performance but differ in scope. ROI shows profit or loss as a percentage of cost for the total investment period. Rate of return is typically annualised — allowing fair comparison across investments held for different lengths of time. When comparing investments with different time horizons, use annualised rate of return rather than raw ROI. To put roi figures in context, compare them to the current interest rate — if a savings account pays 4.5%, an investment with 4% ROI over the same period has underperformed. For major investing decisions, consult a financial adviser.

ROI is a useful roi metric for quick comparisons but has real limitations. It ignores time — a 100% ROI over 10 years is far less impressive than 100% over 1 year. It also ignores risk, cash flow, and the opportunity cost of the purchase price. For major investing decisions, use ROI alongside net present value (NPV), payback period, and internal rate of return (IRR). The bottom line: ROI works best as a fast filter for comparing investments — if roi figures are clearly positive or clearly high roi, other metrics help you decide between shortlisted options.