Calculate return on investment for any business decision. Compare options and make data-driven choices.
Formula
ROI = ((Return - Investment) / Investment) x 100
Monthly ROI = ROI / Months
Annual ROI = Monthly ROI x 12
Tips for Improving ROI
A positive ROI means you're earning more than you invested. Always compare annualized ROI when evaluating investments with different time horizons.
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Get StartedReturn on investment is the universal metric for evaluating whether a business decision paid off. Whether you're considering a new marketing channel, a software tool, or an entire business venture, ROI gives you a clear percentage that makes comparison easy.
Simple ROI compares your net profit to your initial investment. If you invest $10,000 and earn $15,000 in return, your ROI is 50%. Simple, but it doesn't account for time.
Annualized ROI normalizes your return to a yearly basis. A 50% return over 2 years is very different from 50% over 6 months. Annualizing makes it easy to compare investments with different time horizons.
Payback period tells you how long it takes to recoup your initial investment. For bootstrapped founders, this is often more important than total ROI. A shorter payback period means less risk and faster access to profit.
This calculator also accounts for ongoing monthly costs, which is critical for SaaS investments, marketing campaigns, and tool subscriptions. A tool that costs $500/month for 12 months adds $6,000 to your total investment, which can significantly change your ROI calculation.
When evaluating business opportunities, look for investments with high annualized ROI and short payback periods. These are the opportunities that let you reinvest profits quickly and compound your growth over time.