ROI Calculator
Calculate return on investment, net gain or loss, return multiple, break-even value and optional annualized return.
Investment return
ROI formula
Return on investment compares net gain or loss with the complete amount invested. This calculator treats the initial investment plus additional costs as the denominator:
ROI = (final value + income − initial investment − additional costs) ÷ (initial investment + additional costs) × 100%
The return multiple is total proceeds divided by total invested. A multiple of 1.25× means proceeds equal 125% of the amount invested. Break-even final value is total invested minus income already received, with a minimum of zero.
Annualized ROI formula
When the holding period is supplied and total proceeds are positive, the calculator uses a compound annual growth rate:
Annualized return = (total proceeds ÷ total invested)1 ÷ years − 1
Total ROI and annualized return are different. Total ROI describes the entire holding period; annualized return converts the same start-to-finish multiple to an equivalent compound yearly rate. It does not account for the exact timing of intermediate cash flows.
Checked examples
| Inputs | Net return | Total ROI |
|---|---|---|
| $10,000 initial + $500 costs; $13,000 final + $1,000 income | $3,500 | 33.33% |
| $1,000 invested; $700 final value | −$300 | −30.00% |
| $2,000 initial + $100 costs; $1,800 final + $500 income | $200 | 9.52% |
How to use the ROI calculator
- Enter the initial amount committed to the investment or project.
- Add transaction fees, setup expenses or other costs that should be part of the invested amount.
- Enter the current or realized final value and any separate cash income received.
- Optionally enter the holding period in years to calculate a compound annualized return.
- Keep every monetary input in the same currency.
Limits of ROI
- ROI does not measure risk, volatility, liquidity or the probability of receiving projected proceeds.
- A simple ending-value calculation does not represent deposits or withdrawals made at different dates. IRR or XIRR is more appropriate for irregular cash flows.
- Taxes and inflation are included only if you manually adjust the inputs.
- Past or estimated returns do not guarantee future results. This is a calculation tool, not investment advice.
Frequently asked questions
What does a negative ROI mean?
It means total proceeds are below the amount invested. For example, receiving $700 from a $1,000 investment produces a −30% ROI.
Is ROI the same as profit margin?
No. ROI divides net return by invested cost. Profit margin divides profit by revenue or selling price, so the denominator is different.
Can ROI be greater than 100%?
Yes. A 100% ROI means the net gain equals the entire invested amount, so total proceeds are twice the cost.
Why is annualized return unavailable for some losses?
A real compound annualized rate requires positive ending proceeds. If proceeds are zero, there is no finite annual compound rate that reaches exactly zero.
Related calculators
Use the Compound Interest Calculator to model recurring contributions and growth over time, or the Percentage Calculator for general percentage changes.
Product pricing: Convert between cost, selling price, profit margin and markup with the Margin Calculator.
Related: For rental-property operating income and valuation, use the Cap Rate Calculator.