Calculate your Return on Investment and see a full profit breakdown.
Return on Investment (ROI) is a financial metric used to evaluate the efficiency or profitability of an investment. It measures the return relative to the cost of the investment. ROI is expressed as a percentage — the higher the ROI, the more profitable the investment relative to its cost. It is one of the most commonly used metrics in business and investing.
ROI is calculated by subtracting the initial investment from the final value, dividing by the initial investment, and multiplying by 100 to get a percentage. For example, if you invest $10,000 and it grows to $15,000, your ROI is ($15,000 − $10,000) ÷ $10,000 × 100 = 50%.
Annualized ROI adjusts the total ROI to show the average return per year. This makes it easier to compare investments held for different time periods. For example, a 50% ROI over 5 years is less impressive than a 50% ROI over 1 year. The annualized ROI formula accounts for compounding to give a more accurate picture.
A good ROI depends on the type of investment and the time period. For stocks, an annual ROI of 7–10% is generally considered good based on historical market averages. For real estate, 8–12% annually is typical. Higher ROI often comes with higher risk.
Yes. A negative ROI means the investment lost value. For example, investing $10,000 and ending up with $8,000 gives an ROI of -20%. Negative ROI is a loss.
ROI measures return relative to total investment cost. ROE (Return on Equity) measures return relative to shareholders' equity and is used specifically in corporate finance to assess how efficiently a company uses equity capital.