How is ROI calculated?

ROI = (final value − initial cost) ÷ initial cost × 100, rounded to two decimal places. The dollar figure alongside it is net profit: final value minus initial cost. Both come straight from the two numbers you enter.

Is the result annualized?

No — it is the total return over the whole holding period, however long that was. To compare investments held for different lengths of time, annualize with (final ÷ cost)^(1 ÷ years) − 1. For example, 56.25% earned over three years works out to about 16.04% per year.

What should I include in the initial cost?

Every dollar it took to acquire and hold the investment: purchase price plus commissions, closing costs, renovation or setup costs, ad spend, maintenance — whatever applies. Leaving costs out inflates the ROI and can make a mediocre investment look great.

Yes. Whenever the final value is below the cost, both outputs go negative: $1,000 that is now worth $900 shows −10% ROI and −$100 net profit. A −100% ROI means the investment became worthless.

What counts as a good ROI?

It depends entirely on the time period and the risk taken — there is no universal threshold. A sensible check is to compare against what a passive benchmark, such as a broad index fund or even a savings account, returned over the same stretch. A high ROI earned with extreme risk or over many years may be less impressive than it first looks.

No — the math runs in your browser and nothing is stored or transmitted.

ROI Calculator

Calculate return on investment (ROI) and net profit from cost and final value.

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Initial cost$Final value$

ROI

50%

Net profit

$500

How it works

Return on investment (ROI) is the most common yardstick for whether something was worth the money. This calculator computes simple ROI — your percentage gain or loss relative to what you paid — plus the net profit in dollars. It works for anything with a cost and an ending value: a stock position, a rental property, a marketing campaign, a piece of equipment.

The formulas: net profit = final value − initial cost, and ROI = (final value − initial cost) ÷ initial cost × 100, rounded to two decimal places. This is a total return over the whole holding period — the calculation has no time dimension at all, which matters when you interpret it.

Worked example: you invest $800 and it is now worth $1,250. Net profit is 1,250 − 800 = $450, and ROI is 450 ÷ 800 × 100 = 56.25%. The formula handles losses symmetrically: a $1,000 investment now worth $900 shows −10% ROI and −$100 net profit, and an ROI of exactly 0% means you got your money back and nothing more.

Two pitfalls dominate ROI misuse. First, because ROI ignores time, 56.25% earned in one year and 56.25% earned over a decade look identical. To compare holdings of different lengths, annualize: (final ÷ cost)^(1 ÷ years) − 1. The 56.25% example spread over three years is about 16.04% per year. Second, understating the cost overstates the return — fold every acquisition and holding cost into the initial figure: commissions, closing costs, renovations, ad spend, maintenance. Likewise, income collected along the way — rent or dividends — belongs in the final value, or the return is understated. And a strong past ROI says nothing about what the next period will deliver.

Frequently asked questions

How is ROI calculated?: ROI = (final value − initial cost) ÷ initial cost × 100, rounded to two decimal places. The dollar figure alongside it is net profit: final value minus initial cost. Both come straight from the two numbers you enter.
Is the result annualized?: No — it is the total return over the whole holding period, however long that was. To compare investments held for different lengths of time, annualize with (final ÷ cost)^(1 ÷ years) − 1. For example, 56.25% earned over three years works out to about 16.04% per year.
What should I include in the initial cost?: Every dollar it took to acquire and hold the investment: purchase price plus commissions, closing costs, renovation or setup costs, ad spend, maintenance — whatever applies. Leaving costs out inflates the ROI and can make a mediocre investment look great.
Can ROI be negative?: Yes. Whenever the final value is below the cost, both outputs go negative: $1,000 that is now worth $900 shows −10% ROI and −$100 net profit. A −100% ROI means the investment became worthless.
What counts as a good ROI?: It depends entirely on the time period and the risk taken — there is no universal threshold. A sensible check is to compare against what a passive benchmark, such as a broad index fund or even a savings account, returned over the same stretch. A high ROI earned with extreme risk or over many years may be less impressive than it first looks.
Is my data uploaded?: No — the math runs in your browser and nothing is stored or transmitted.

ROI Calculator

How it works

Frequently asked questions

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