ROI Calculator
Calculate Return on Investment (ROI) percentage and net profit. Measure the profitability of any investment.
How to Calculate ROI
Net Profit = Gain − Cost
ROI measures the efficiency of an investment by comparing the net profit to the original cost. A positive ROI means you earned money; a negative ROI means you lost money.
Investment Cost = $5,000, Total Return = $7,500
Net Profit = $7,500 − $5,000 = $2,500
ROI = ($2,500 / $5,000) × 100 = 50%
Interpreting ROI
- ROI > 0% — Profitable investment
- ROI = 0% — Break even
- ROI < 0% — Loss on investment
Limitations of ROI
ROI doesn't account for time. A 50% ROI over 1 year is much better than 50% over 10 years. For time-adjusted returns, consider annualized ROI or use the compound interest calculator.
FAQ
What is a good ROI?
It depends on the investment type and risk. The stock market historically averages about 10% annually. Real estate aims for 8–12%. A "good" ROI should exceed inflation and compensate for risk.
Can ROI be negative?
Yes. If your total return is less than your investment cost, ROI is negative, indicating a loss.
How do I calculate annualized ROI?
Annualized ROI = ((1 + ROI)1/years − 1) × 100. This normalizes different investment periods for fair comparison.
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Last updated: 2026-08-08