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ROI Calculator

Calculate ROI, net return, cost basis, and optional annualized return.

ROI Calculator tool

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About This Tool

Calculate a simple return on investment by comparing an ending value or proceeds with the total cost basis you enter. The tool reports net return and ROI percentage, can include additional costs in the invested basis, and can optionally convert the beginning-to-ending value change into a compound-equivalent annual rate. It is designed for arithmetic checks and scenario comparison, not to predict returns or recommend an investment.

How To Use It

  1. Enter the initial amount invested.
  2. Enter the final value or proceeds measured on the same currency basis.
  3. Add fees, setup costs, or other amounts to Additional costs only when you intentionally want them included in the ROI cost basis.
  4. Optionally enter a positive duration in years to see the compound-equivalent annualized rate between the total starting cost basis and ending value.
  5. Interpret the result using the same assumptions and cost definitions across scenarios. For investments with deposits, withdrawals, dividends, or other intermediate cash flows, a cash-flow-aware measure may be more appropriate.

Examples

30% simple ROI

An initial investment of 1,000 that ends at 1,300 with no additional costs has a net return of 300 and simple ROI of 300 ÷ 1,000 × 100 = 30%.

Include additional costs

If 1,000 is invested, 200 of additional costs are included, and final proceeds are 1,500, the cost basis is 1,200. Net return is 300 and ROI is 25%.

Negative ROI

If total invested cost is 1,000 and the ending value is 800, net return is −200 and simple ROI is −20%. A negative result represents a loss relative to the entered cost basis.

Annualized equivalent

If 1,000 grows to 1,210 over two years with no other costs or cash flows, the compound-equivalent annualized rate is 10% per year because 1,000 × 1.10² = 1,210.

Useful Notes

Simple ROI formula

Total invested cost = initial investment + additional costs. Net return = final value − total invested cost. ROI (%) = net return ÷ total invested cost × 100. The cost basis must be greater than zero for this ratio to be defined.

ROI depends on what you include as cost

ROI is only as meaningful as its inputs. Fees, maintenance, taxes, financing, labor, shipping, opportunity cost, and other items may or may not belong in a particular analysis. This calculator does not infer them; it includes only the initial investment and additional costs you enter.

What the annualized figure means

When duration is provided and ending value is positive, annualized equivalent return = (final value ÷ total invested cost)^(1 ÷ years) − 1. It is a compound-equivalent rate between two endpoints. It is not an internal rate of return and does not model the timing of intermediate cash flows.

Simple ROI versus annualized return

Simple ROI describes the total percentage gain or loss over the entire period and does not by itself account for time. Annualizing makes different durations easier to compare mathematically, but the result still depends on the simplified beginning-and-ending-value assumption.

Use ROI as a comparison input, not a guarantee

Historical or scenario ROI does not establish future performance, risk, liquidity, taxes, inflation, or whether an investment is suitable. For consequential financial decisions, consider the full cash-flow pattern, risk and costs, and qualified professional guidance where appropriate.

FAQ

What does a negative ROI mean?

It means the entered ending value is lower than the entered total invested cost. For example, 800 ending value against 1,000 cost basis produces a −20% simple ROI.

Should I include fees in ROI?

Include costs that belong to the comparison you are intentionally making. The calculator provides an Additional costs field so fees or other costs can be included in the cost basis, but it cannot determine which accounting treatment is correct for your situation.

Is ROI the same as profit margin?

No. ROI divides net return by the invested cost basis. Profit margin generally divides profit by sales or revenue. Hanakash's Profit Margin Calculator handles that separate pricing/business ratio.

Is annualized ROI the same as IRR?

No. The annualized figure here is a compound-equivalent rate using one beginning cost basis and one ending value. IRR is a cash-flow-aware calculation that can account for multiple dated cash flows.

Can ROI predict whether an investment will be profitable?

No. The calculator only evaluates the numbers you enter. It does not forecast prices, demand, risk, taxes, inflation, cash flows, or future returns and should not be treated as individualized financial advice.