Business math, made visible
ROI calculator
ROI calculator
Measure the gain relative to what you spent.
Inputs stay in this browser. Results use your entries and the formula below.
This ROI calculator compares the total amount returned with the cost of an investment. Enter the full initial cost and the total money or value received for the same project and period. The result shows the percentage gain or loss, the dollar gain, and the amount returned relative to cost. Use it to check a completed business purchase or a clearly defined scenario. It is a simple return calculation: it does not discount future cash flows or annualize the result.
Worked example
| Source item | Published value |
|---|---|
| Initial amount | $100 |
| Amount after the first year | $105 |
| Stated annual interest rate | 5% |
Investor.gov gives this compound-interest example. Reusing the initial and final amounts as a simple return calculation produces a $5 gain and 5% ROI. This is an educational example, not a predicted business return. Source: SEC Investor.gov: compound-interest worked example.
How it works
ROI (%) = ((total amount returned - investment cost) / investment cost) * 100
Formula basis: FGDC: net-benefit ROI definition, page 43. Ratios are converted to percentages for display. Intermediate values retain full calculation precision; displayed amounts are rounded.
What belongs in the amount returned?
Include the total value recovered, including any returned principal. Entering only the gain in that field would subtract the initial cost again. For a project that generates savings, use total benefits over a stated period and include all costs in the cost field. Keep the treatment of operating costs consistent: subtracting an expense from benefits and also adding it to costs would count it twice.
Compare returns on the same basis
A percentage return does not describe the size or timing of a project. Preserve the dollar gain alongside the percentage and record the period covered. Projects with different durations need an additional timing analysis. The FGDC source defines ROI using net present benefits and present costs. This calculator uses the same net-benefit-to-cost relationship, but performs no discounting. Enter already discounted amounts if you need that basis.
Read losses and zero returns
When the total returned is below cost, the gain and ROI are negative. Equal amounts produce no gain. A positive investment cost is required because it is the denominator. A total returned amount of zero means the full cost was lost in this model. Adding later contributions to an ending value can overstate performance unless those contributions are also treated consistently as costs.
Use the formula in a spreadsheet
With investment cost in A1 and total amount returned in B1, use =(B1-A1)/A1. Format that cell as a percentage. Do not multiply by 100 as well when percentage formatting already performs the display conversion.
Frequently asked questions
What is the ROI calculator formula?
Subtract investment cost from the total amount returned, then divide that gain by investment cost. The tool expresses this ratio as a percentage.
Can I use ROI for an equipment purchase?
Yes, if you have a defined period and consistent estimates or records of all costs and benefits. For the time needed to recover the initial cost, use the payback calculator.
How do I calculate ROI in Excel?
Use =(B1-A1)/A1 with cost in A1 and total returned in B1, then apply percentage formatting.
Is this annualized ROI?
No. This tool reports the return for the entire period represented by your inputs. The CAGR calculator annualizes a beginning and ending value without intermediate cash flows.
Can ROI be negative?
Yes. A loss occurs when the amount returned is less than the amount spent. The calculator accepts a zero total return, but requires positive cost.
Is ROI the same as a benefit-cost ratio?
No. ROI uses net benefits, while a benefit-cost ratio uses total benefits. The extra returned-to-cost figure is shown separately so the two are not confused.
Sources
Data as of 2026-10-05. Examples are historical teaching examples, not current prices or market benchmarks. Calculated results are derived from entered values.
Return to the business calculator hub to choose another measure.