Quick answer
How do you calculate ROI?
Use ROI = ((Gain − Cost) ÷ Cost) × 100. Enter the matching values above to calculate the result instantly.
What it measures
Understanding ROI
Return on investment (ROI) expresses the net benefit of an investment as a percentage of its cost. It gives teams a common way to compare opportunities that have very different budgets. A positive ROI means the gain exceeded the cost, while a negative result means the investment lost value. For a useful comparison, include every material cost tied to the decision—setup, labor, software, fees, and ongoing spend—not just the headline purchase price. The gain should also use the same time period and scope. ROI is intentionally simple, which makes it excellent for a first-pass decision, but it does not account for how long an investment takes to pay back or the changing value of money. Two projects can show the same ROI even when one returns cash in three months and the other takes three years. Use this result alongside payback period, cash-flow forecasts, and risk when the timing or uncertainty is significant.
The math
Return on investment formula
Worked example
Example calculation
- Calculation
- (($15,000 − $10,000) ÷ $10,000) × 100
- Result
- 50% ROI
Step by step
How to use this calculator
- 1Enter the total value or gain produced.
- 2Enter the complete cost of the investment.
- 3Review the percentage return and compare it with your target.
Decision support
When this calculator is useful
- Comparing capital purchases
- Evaluating campaigns or projects
- Reviewing investment performance
Common questions
Frequently asked questions
What is a good ROI?
A good ROI exceeds your required return after accounting for time, risk, and realistic alternatives. The right target varies by industry and investment type.
Can ROI be negative?
Yes. A negative ROI means the investment's gain was lower than its cost.
Should revenue or profit be used as gain?
Use the value your analysis is meant to measure and stay consistent. For business decisions, net benefit is usually more informative than gross revenue.
Does ROI include time?
No. Basic ROI does not reflect the holding period, so compare timeframes separately.
Calculation reviewed: 2026-06-18. CalcPilot uses the formula shown above and tests representative values during the production build. See our methodology and correction policy.
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