Finance
ROI Calculator
Calculate return on investment from what you put in and what you got back, and see the annualized ROI over your holding period. Free, instant, no signup.
Enter the amount you invested and the total you got back to see your ROI.
All calculations happen in your browser. Nothing is stored.
✳ Free · No signup · Runs in your browser — we never store your numbers
Small business guide
What this tool helps you do
Use this free ROI calculator to turn two numbers — what you invested and what you got back — into the metric that decides whether something was worth it: return on investment. It is built for small business owners weighing a purchase, a marketing campaign, a piece of equipment, or a side project.
ROI answers one blunt question: for every dollar you put in, how many dollars came back? The calculator does the arithmetic instantly and, if you enter a holding period, also shows your annualized ROI so you can compare investments that played out over different lengths of time.
How to use this tool
- 1
Enter the amount invested — the total cash you put in, including fees, setup, and any ongoing costs tied to the investment.
- 2
Enter the amount returned — the total value you got back, not just the profit. If a $1,000 ad spend produced $1,500 in gross profit, enter $1,500.
- 3
Optionally enter the holding period in years to see annualized ROI, which lets you compare a 2-year investment against a 6-month one on equal footing.
- 4
Read ROI first, then net gain. A high ROI on a tiny investment can still be a small dollar gain — check both.
Formula
ROI % = (amount returned − amount invested) ÷ amount invested × 100. Annualized ROI = ((amount returned ÷ amount invested) ^ (1 ÷ years) − 1) × 100.
- ROI uses the amount invested as the denominator, so it always tells you the return relative to what you risked.
- A negative ROI means you got back less than you put in — the investment lost money.
- Annualized ROI (also called CAGR) smooths the total return into a per-year rate, which is the only fair way to compare investments of different durations.
- ROI ignores timing of cash flows within the period. For long or irregular projects, treat annualized ROI as an approximation.
Examples
Equipment purchase
A bakery spends $4,000 on a second oven and it generates $6,000 in extra gross profit over the year.
Inputs
- Amount invested: $4,000
- Amount returned: $6,000
- Holding period: 1 year
Result
ROI is 50% with a $2,000 net gain.
Every dollar put into the oven returned $1.50. Because it happened in one year, the annualized ROI is also 50%.
Marketing campaign over two years
An owner invests $10,000 in a content and SEO push and it produces $16,000 in attributable revenue over two years.
Inputs
- Amount invested: $10,000
- Amount returned: $16,000
- Holding period: 2 years
Result
Total ROI is 60% ($6,000 net gain), and annualized ROI is about 26.5% per year.
The headline 60% looks great, but spread over two years the annualized 26.5% is the number to compare against other uses of that $10,000.
Key terms
Return on investment (ROI)
The percentage gain or loss relative to the amount invested. Positive ROI means you made money; negative means you lost it.
Annualized ROI (CAGR)
The equivalent steady per-year return that would produce the same total result over the holding period. Use it to compare investments of different lengths.
How to interpret the result
A good ROI depends on the alternative
There is no universal "good" ROI. Judge it against what else you could have done with the money — paying down debt, another marketing channel, or simply the risk-free return. If an investment beats your next-best option after accounting for risk, it is worth considering.
Net dollars matter as much as the percentage
A 300% ROI on a $50 spend is only $150. A 30% ROI on a $50,000 investment is $15,000. Look at both the percentage and the net gain before deciding where to put your next dollar.
Common mistakes
- Entering only the profit in the "amount returned" field instead of the total value received.
- Forgetting to include all costs (fees, setup, labor) in the amount invested, which inflates ROI.
- Comparing a multi-year ROI against a one-year ROI without annualizing — always convert to a per-year rate first.
- Treating ROI as certainty. It is a backward-looking or projected estimate, not a guarantee.
Frequently asked questions
How do I calculate ROI?+
Subtract the amount invested from the amount returned, divide by the amount invested, then multiply by 100. For example, $1,500 back on a $1,000 investment is (1500 − 1000) ÷ 1000 × 100 = 50% ROI.
What is a good ROI for a small business?+
It depends on the investment and its risk, but many small business owners look for marketing and equipment ROI well above 20–30% to justify the effort and risk. The real test is whether it beats your next-best use of the same money.
What is the difference between ROI and annualized ROI?+
ROI is the total return over the whole period. Annualized ROI (CAGR) converts that into a per-year rate, so you can fairly compare an investment held for six months against one held for three years.
Can ROI be negative?+
Yes. If you get back less than you invested, ROI is negative — the investment lost money. A $1,000 investment that returns $800 has a −20% ROI.
Does this ROI calculator account for taxes and inflation?+
No. It gives you the raw return. For a truer picture, subtract taxes on any gain and remember that inflation erodes real returns over longer holding periods.