Methodology
ROI Calculator โ Methodology
ROI (return on investment) is profit as a percentage of cost: ROI = ((Net Return โ Investment) รท Investment) ร 100. Investing $10,000 and earning back $13,500 is a 35% ROI. Annualised ROI normalises across different holding periods for fair comparison between investments.
Last reviewed:
What this calculator computes
- Calculates ROI percentage and absolute net profit
- Annualised ROI for comparing investments of different durations
- Color-coded result tier (green โฅ20%, amber 0โ19%, red negative)
- Region-aware currency formatting
Step-by-step calculation
Measure ROI on any business spend โ marketing, equipment, training โ with optional annualisation for fair comparisons.
Enter initial investment
The total amount you spent upfront on the investment.
Enter net return
The total return or revenue the investment generated.
Optionally enter the period in months
Add the investment period to see annualised ROI alongside total ROI.
Read ROI, net profit, and annualised rate
The calculator shows ROI as a percentage, net profit in cash, and the annualised rate for comparison against other investments.
Assumptions and overrides
Simple ROI does not account for the time value of money. For investments held over multiple years, use the annualised ROI for fair comparison.
Every region default on the calculator is editable. If your effective rate, fee, or threshold differs from the headline figure shown, type your own number into the field โ the calculator recomputes instantly without leaving this page.
Review cadence and corrections
This methodology and the underlying rate defaults are reviewed at least annually, and immediately following any change to the headline rate from IRS, HMRC, or SARS. Every substantive update is recorded on the public changelog. Spotted an error? See the corrections policy for how to report it.
See the full editorial policy for the standards every page on BusCalcTools is held to.
Use the calculator
Open the ROI Calculator to put this methodology to work. Or browse other Funding & Valuation calculators.
Written by
James BlanckenbergFounder, BusCalcTools
Founder of BusCalcTools and FinnCalc. Builds practical financial calculators for small business owners and freelancers across the US, UK, and South Africa.
Editorial review by: James Blanckenberg, Founder & Editor
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