ROI Calculator - Return on Investment
Investment Analysis
Calculate return on investment and analyze profitability
Calculation Type
Frequently Asked Questions
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ā¹ļø What is ROI Calculator?
An ROI (Return on Investment) calculator measures the profitability of an investment as a percentage of its cost. It is used in business decisions, marketing performance, stock analysis, and any scenario where you want to know how much you gained relative to what you spent.
š Formula
āļø Worked Example
- 1Gain = $14,500 ā $10,000 = $4,500
- 2ROI = ($4,500 / $10,000) Ć 100 = 45%
š” How to Interpret Results
- āøPositive ROI means the investment generated profit; negative ROI means a loss.
- āøCompare ROI to the risk-free rate (e.g., treasury bonds at ~5%) to assess if the risk was worth it.
- āøROI does not account for time ā a 50% ROI over 10 years is far less impressive than 50% in 1 year.
- āøFor business decisions, compare the ROI of all options and prioritize the highest risk-adjusted returns.
- āøMarketing ROI ā„ 400% (4:1) is generally considered a healthy return.
ā Frequently Asked Questions
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Frequently Asked Questions
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