ROI Calculator

Return on investment is (gain minus cost) divided by cost, expressed as a percentage. It is the simplest measure of whether something paid off, and its simplicity is both why it is used everywhere and why it is misread so often.

The critical omission is time. ROI has no time dimension. A 50% return is excellent over one year and poor over twenty, but plain ROI reports both as 50%. Comparing two investments of different durations on ROI alone is not a meaningful comparison. For that you need an annualised figure — the compound annual growth rate — which restates the return as an equivalent yearly rate and makes different holding periods comparable.

The second omission is what counts as cost. A property ROI that ignores closing costs, maintenance, vacancy, and selling commission will look far better than the investment actually was. A marketing ROI that counts ad spend but not staff time overstates the result the same way. The denominator should include every cost required to obtain the gain, including ones that never appeared on an invoice.

Risk is invisible here too. ROI describes an outcome that already happened; it says nothing about the probability of that outcome or the range of others that were possible. A high realised return on a concentrated position and a moderate return on a diversified one can show the same number while representing very different decisions. Use ROI to measure, not to rank. Everything runs in your browser — no login, no upload, and no figure you enter leaves the page.