Return on Investment Calculator
Calculate return on investment (ROI) — the simple percentage gain or loss from an investment relative to its initial cost. Use it as the most universal profitability measure for marketing campaigns, real estate, stock trades, and business projects.
Last updated: May 2026
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About this calculator
The formula is: ROI = (gain from investment − cost of investment) ÷ cost of investment × 100. The numerator is the net gain (or loss, if negative), and dividing by cost expresses the result as a percentage of what you originally put in. A $10,000 investment that returns $13,000 has produced a $3,000 net gain on $10,000 of cost, or 30% ROI. The metric is universal and easy to compute, which is why it appears in marketing, investing, real estate, and capital budgeting decisions. But simple ROI has a critical limitation: it ignores time. A 30% ROI earned in 3 months is wildly different from a 30% ROI earned over 10 years — the first annualizes to roughly 167%, the second to about 2.7%. Always pair simple ROI with the holding period (or use annualized ROI / CAGR) when comparing alternatives. Edge cases: a cost of zero produces division by zero; a loss produces a negative percentage; "gain" can be defined in different ways (gross proceeds, net of fees, after-tax) and people often calculate it inconsistently. ROI also ignores risk: a 30% return from a single risky stock and a 30% return from a diversified bond portfolio look identical in this formula despite very different risk profiles. For investments with multiple cash flows over time (rentals, businesses, dividend stocks), simple ROI is too crude — use IRR or money-weighted return instead.
How to use
Example 1 — Marketing campaign. You spend $50,000 on a Google Ads campaign and it generates $185,000 of attributable revenue with a 60% gross margin (so attributable gross profit is $111,000, which is the relevant "gain" since the cost of goods scaled with the additional sales). Enter 111000 for Gain From Investment and 50000 for Cost of Investment. Result: 222.0%. Verify: 111,000 / 50,000 × 100 = 222.0. ✓ Strong ROI for paid media; the campaign produced $2.22 of gross profit for every $1 spent, well above the rough industry threshold of 100% (a 1:1 ratio of profit to cost) needed to justify continuing. Example 2 — Stock trade. You buy 200 shares at $42.75 each (total cost $8,550) and sell 14 months later at $51.30 each (proceeds $10,260), minus $20 in transaction fees. Net gain is 10,260 − 8,550 − 20 = $1,690. Enter 1690 and 8550. Result: 19.77%. Verify: 1,690 / 8,550 × 100 ≈ 19.77%. ✓ Solid simple ROI for a 14-month hold, but annualizing matters for comparison: at 14 months that's roughly 16.7% annualized, in line with strong historical equity returns but well below the gains needed to justify single-stock concentration over a diversified index.
Frequently asked questions
What is the difference between ROI and ROA / ROE?
ROI is a general-purpose metric for any specific investment — a campaign, a property, a stock trade. ROA (Return on Assets) and ROE (Return on Equity) are specifically corporate-finance metrics that measure how efficiently a company generates profit from its asset base or shareholder equity, respectively. ROA = net income ÷ average total assets; ROE = net income ÷ average shareholder equity. All three are percentage ratios of return to base, but they answer different questions: ROI evaluates a discrete investment decision, ROA evaluates corporate operational efficiency in deploying assets, and ROE evaluates how well a company multiplies shareholder capital (including via leverage). High ROE driven by high ROA reflects genuine quality; high ROE driven by high debt may simply mean the company is taking more risk.
Should I include all costs and all gains in the ROI calculation?
Yes — the most common mistake in ROI is missing costs or gains. For real estate: include purchase price, closing costs, renovation, property taxes, insurance, maintenance, mortgage interest, and selling costs on the cost side, and include all rental income plus sale proceeds on the gain side. For marketing: include media spend, agency fees, creative production, and the COGS that scales with the additional sales (since you only made gross profit on those sales, not gross revenue). For stocks: include brokerage fees, taxes, and any borrowing cost if margin was used; gains should be net of those costs. The cleanest ROI is computed in cash terms: subtract every dollar you ever paid out from every dollar you ever received, divide by the total dollars paid out. Excluding "small" costs systematically biases ROI estimates upward and leads to bad capital allocation decisions.
How does ROI differ from annualized ROI / CAGR?
Simple ROI is just total gain divided by initial cost, expressed as a percentage — a $10,000 investment that becomes $15,000 has a simple ROI of 50% regardless of whether that took 2 years or 20. Annualized ROI (or CAGR) converts that total return into an equivalent constant annual rate using compound math; over 2 years the same 50% gain is 22.5% annualized, while over 20 years it is only 2.05% annualized. Annualized ROI is the only fair way to compare investments of different durations. Use simple ROI when the time period is fixed or already understood (a 90-day marketing campaign), and annualized ROI when comparing across investments of different lengths. Most professional investment reporting uses annualized figures by default — when an asset manager says "10% return last year" they typically mean annualized.
What are the most common mistakes people make calculating ROI?
The biggest is forgetting time — a 100% ROI over 20 years (3.5% annualized) sounds impressive until you realize a savings account would have done better. The second is using inconsistent cost and gain definitions: comparing pre-tax gain to after-tax cost, or gross revenue to net cost. The third is omitting costs that are easy to forget — transaction fees, taxes, maintenance, opportunity cost of tied-up capital. The fourth is treating ROI as risk-free comparison: a 50% ROI from a single risky bet and a 50% ROI from a diversified portfolio look identical in the formula but represent very different decisions. The fifth is using accounting profit instead of cash flow — depreciation, amortization, and accruals distort accounting profit but do not represent actual money received or spent. Finally, people often calculate ROI on a single investment in isolation rather than comparing against the "what else could I have done with the money" alternative (opportunity cost) — the right comparison is always ROI vs the next-best use of capital.
When should I not use this calculator?
Skip it for investments with multiple cash flows over time (rental property with rent, business with ongoing distributions, dividend-reinvesting stocks) — for those, use IRR or money-weighted return that handles a stream of inflows and outflows. It is the wrong tool when you need risk-adjusted comparison (Sharpe ratio, alpha) — ROI ignores volatility entirely. Do not use it for very short holding periods (a few days or weeks) where annualizing the figure produces misleadingly high percentages. It is also a poor fit for investments where the "final value" is illiquid or uncertain (private equity, art, startup equity) — you cannot compute meaningful ROI until the position is realized. For corporate capital budgeting decisions, ROI is a useful first-pass filter but should be paired with NPV (which accounts for the time value of money) and IRR (which handles multiple cash flows) before committing significant capital.