What is Return on Investment (ROI)?

ROI is a financial metric used to evaluate the efficiency or profitability of an investment. It measures the return generated on an investment relative to its cost.

How is ROI calculated?

ROI is calculated using the formula:

ROI (%) = [(Gain from Investment – Cost of Investment) / Cost of Investment] × 100

What inputs are required for the ROI calculator?

Typically, you’ll need:

• Initial Investment Amount
• Final Value or Return
• Any Additional Costs or Expenses
• Investment Duration (optional for time-based analysis)

Can this calculator handle multiple investments?

No, this calculator is designed for evaluating a single investment at a time. For portfolio ROI or comparing multiple investments, use advanced financial tools.

What does a negative ROI mean?

A negative ROI indicates a loss on your investment — you got back less than you put in.

Does ROI take time into account?

Basic ROI does not factor in the time period of the investment. For time-based returns, use Annualized ROI or Compound Annual Growth Rate (CAGR).

Is ROI the same as profit percentage?

Not exactly. While similar, ROI considers the total cost of investment, including expenses, while profit percentage may only consider direct revenue versus cost of goods sold.

Can I use ROI to compare different types of investments?

Yes, ROI is commonly used to compare the efficiency of different investment options, such as stocks, real estate, or business ventures.

Is tax or inflation considered in this calculator?

No, this basic ROI calculator doesn’t adjust for taxes or inflation. Use advanced tools for after-tax or real returns.

Why does my ROI seem too high or too low?

Make sure all values entered are accurate. Common mistakes include forgetting to include fees, taxes, or using the wrong return amount.

Can I use this calculator for business projects?

Yes. ROI is widely used in business to evaluate the return on marketing campaigns, product launches, or infrastructure investments.