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Marketing / ROI Calculator

ROI Calculator

Return on investment and annualized ROI for a project, campaign, piece of equipment or property, from what went in and what came back.
$

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Everything it cost: purchase price, setup, fees.

$

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Sale value or total income it produced.

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Adds annualized ROI.

ROI
35.0%
$3,500.00net gain
22.1%annualized ROI
1.35xreturn multiple
Amount returned$13,500.00
Amount invested−$10,000.00
Net gain$3,500.00
ROI · net gain ÷ amount invested35.0%
Annualized ROI · over 18 months22.1%

35.0% over 18 months is the same as 22.1% a year, compounded.

See breakdown

How the ROI calculation works

  1. ROI is net gain divided by the amount invested

    Invest $10,000 and get $13,500 back: the gain is $3,500, so ROI is 35%.

  2. Count every cost in the amount invested

    Include setup, fees, shipping and your own paid time. Leaving costs out makes ROI look better than it is.

  3. Annualize to compare different time spans

    Annualized ROI = (returned ÷ invested)^(12 ÷ months) − 1. 35% over 18 months is 22.1% a year.

  4. Work backwards from a target

    Choose Return needed to see what a $10,000 investment must bring back to hit, say, a 35% ROI: $13,500.

Worked example. You invest $10,000 and get $13,500 back after 18 months. Net gain is $3,500, ROI is 35.0%, and annualized ROI is 22.1% a year.

ROI FAQ

What is the ROI formula?

ROI = (amount returned − amount invested) ÷ amount invested × 100. $2,000 back on $1,500 is a 33.3% ROI.

What is annualized ROI?

The yearly rate that, compounded, gives the same total return. It lets you compare a 30% return over three years with a 12% return over one.

How do I calculate marketing ROI?

Use the gross profit the campaign produced as the amount returned and the campaign cost as the amount invested. Using revenue instead of profit overstates ROI.

What is cash-on-cash return?

A rental property measure: yearly pre-tax cash flow ÷ cash you put in. Enter one year's cash flow plus your cash in as the amount returned, with 12 months held, to get it here.

What is a good ROI?

Compare the annualized ROI, not the total, with what the same money could do instead: the interest rate on your business loan or line of credit, or what a safe account pays. A project should beat those by enough to cover its risk and your time. 35% over 18 months is 22.1% a year, which is a fairer number to compare.

Can ROI be negative?

Yes. If you get back less than you put in, ROI is negative. Getting back nothing is −100%.

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