Depends entirely on context. Stock market average is roughly 10% annualized over long periods. Real estate, bonds, business ventures all have different baselines. Compare against alternative investments of similar risk to judge whether an ROI is good.

What's the difference between simple and annualized ROI?

Simple ROI is total return over the holding period. Annualized ROI is the equivalent yearly rate that, compounded over the same period, would produce the same final value. Annualized is the comparable form across different time periods.

Should I use pre-tax or post-tax values?

Pre-tax for comparing investments held in similar tax treatments. Post-tax for assessing the actual return you take home. For decisions, post-tax is usually more meaningful.

Does ROI account for risk?

No. ROI is purely a return metric. Two investments with the same ROI may have very different risk profiles. Sharpe ratio and similar metrics adjust for risk; ROI does not.

How do I handle ongoing income (dividends, rent)?

Include them in final value or adjust the cost basis. The simplest approach is to assume reinvestment and use the total ending value as the final figure.

Is the calculator running on a server?

No. ROI calculation happens in your browser.

What about negative ROI?

Negative ROI means the investment lost money. The calculator handles this; the result is a negative percentage. Annualized loss is also computable.

Can I compare ROIs across currencies?

Convert both initial and final values to a common currency at relevant exchange rates before computing. ROI calculated in different currencies is not directly comparable due to currency fluctuation.

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ROI Calculator

Calculate Return on Investment (ROI) and annualized returns for any investment.

ROI Calculator

Initial Investment ($)

Final Value / Revenue ($)

Time Period (Years) — optional

Enter Initial Investment and Final Value to see results.

ROI % = (Final Value − Initial Investment) / Initial Investment × 100
Annualized ROI = ((1 + ROI)^(1/years) − 1) × 100

About ROI Calculation

Return on Investment (ROI) measures the gain or loss from an investment relative to the amount invested. The formula is straightforward: ROI = (Net Return / Cost of Investment) × 100. A 25% ROI means you got back 25% more than you put in, after subtracting all costs. Despite the simple math, ROI is one of the most-used and most-abused metrics in business — comparisons across investments, time periods, and contexts often hide important differences in scope, time, and risk.

This calculator computes basic ROI from initial investment and final value, optionally accounting for time period to produce annualized ROI. Annualized ROI is essential for comparing investments that ran for different durations: a 30% return over 3 years is not the same as a 30% return over 1 year. The annualized form expresses both as comparable yearly rates.

Calculations run entirely in your browser. The tool is for informational and educational purposes; investment decisions should account for risk, taxes, fees, and many factors a single ROI number cannot capture.

Why Calculate ROI

ROI is the standard yardstick for comparing investments, marketing campaigns, capital projects, and business decisions. Whether choosing between two stocks, evaluating whether a marketing channel is profitable, or assessing capital expenditure, ROI provides a normalized number that lets disparate options be compared.

The metric also helps with retrospective analysis. Looking back at an investment, computing ROI tells you whether it actually produced the returns expected. Without the calculation, hindsight tends to round in favorable directions. ROI imposes discipline.

How to Calculate ROI

Enter what you put in, what you got back, and the time period.

Enter the initial investment: The total amount paid in. Include not just purchase price but transaction costs, fees, taxes, and any setup expenses. Underestimating cost overstates ROI.
Enter the final value: What the investment is worth now (or what you sold it for, if liquidated). Include any income received during the holding period if not already in the final value.
Enter time period (optional): Number of years (or fractional years) the investment was held. The calculator returns both simple ROI and annualized ROI when this is provided.
Review the result: Simple ROI is the total percentage return. Annualized ROI is the equivalent yearly rate, which is what to use when comparing investments of different durations.

Common Use Cases

Comparing investment options — Two stocks, two real estate purchases, two business ventures — ROI calculation helps compare them on a normalized basis.
Evaluating marketing campaign performance — Spending $10,000 on ads to generate $25,000 in attributable revenue is a 150% ROI — but only if the attribution model is accurate.
Assessing capital expenditure — Replacing equipment, expanding capacity, or other capital projects benefit from upfront ROI estimates and post-hoc actual ROI calculations.
Retrospective investment review — Looking back at completed investments to compute actual ROI helps inform future decisions and disciplines memory bias.
Pitching projects to leadership — Business cases for new initiatives almost always require an ROI estimate. The calculator helps frame the projection.

Technical Details

Simple ROI = ((Final Value − Initial Investment) / Initial Investment) × 100. Returns the total percentage gain or loss over the holding period.

Annualized ROI = (((Final Value / Initial Investment)^(1/years)) − 1) × 100. Normalizes the return to a yearly rate, accounting for compounding. This is the right number for comparing investments of different durations.

Limitations: ROI does not account for risk, opportunity cost, time value of money beyond simple compounding, taxes, or fees beyond what is included in initial investment and final value. Sophisticated investment analysis uses NPV, IRR, and risk-adjusted returns alongside ROI.

Best Practices

Include all costs in initial investment — Transaction fees, taxes paid at purchase, setup costs, and any other expenses tied to making the investment. Excluding these inflates ROI.
Account for taxes on the gain — ROI based on pre-tax values overstates after-tax returns. For meaningful comparisons across taxable and tax-advantaged accounts, use after-tax figures.
Compare annualized, not raw, ROI — Investments of different durations should be compared on annualized basis. A 100% return over 10 years is only 7.2% annualized — not a great investment.
Adjust for risk — Higher-ROI investments often come with higher risk. Compare ROIs of similarly-risky options for fair evaluation; reaching for high ROI in higher-risk assets is not free.

Frequently Asked Questions

What's a 'good' ROI?: Depends entirely on context. Stock market average is roughly 10% annualized over long periods. Real estate, bonds, business ventures all have different baselines. Compare against alternative investments of similar risk to judge whether an ROI is good.
What's the difference between simple and annualized ROI?: Simple ROI is total return over the holding period. Annualized ROI is the equivalent yearly rate that, compounded over the same period, would produce the same final value. Annualized is the comparable form across different time periods.
Should I use pre-tax or post-tax values?: Pre-tax for comparing investments held in similar tax treatments. Post-tax for assessing the actual return you take home. For decisions, post-tax is usually more meaningful.
Does ROI account for risk?: No. ROI is purely a return metric. Two investments with the same ROI may have very different risk profiles. Sharpe ratio and similar metrics adjust for risk; ROI does not.
How do I handle ongoing income (dividends, rent)?: Include them in final value or adjust the cost basis. The simplest approach is to assume reinvestment and use the total ending value as the final figure.
Is the calculator running on a server?: No. ROI calculation happens in your browser.
What about negative ROI?: Negative ROI means the investment lost money. The calculator handles this; the result is a negative percentage. Annualized loss is also computable.
Can I compare ROIs across currencies?: Convert both initial and final values to a common currency at relevant exchange rates before computing. ROI calculated in different currencies is not directly comparable due to currency fluctuation.

ROI Calculator

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About ROI Calculation

Why Calculate ROI

How to Calculate ROI

Common Use Cases

Technical Details

Best Practices

Frequently Asked Questions

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