ROI Calculator
Calculate profit, total ROI, and annualized return from investment cost, final value, income, and holding period.
Total and annualized return
ROI compares the total profit or loss with the initial investment. Annualized return spreads the change across the holding period, making differently timed investments easier to compare.
Which cash received belongs here?
Final value is the remaining value at the end of the period. Enter distributions or other additional cash received separately. Initial investment must be greater than zero.
Limits of simple ROI
Multiple contributions and withdrawals at different dates, risk, inflation, financing, and taxes are not modeled by timing. Those cases require a cash-flow or IRR calculation.
Frequently Asked Questions
How is ROI calculated?
The initial investment is subtracted from final value including additional cash received. That profit or loss is divided by the initial investment and shown as a percentage.
What is the difference between ROI and profit margin?
ROI compares investment profit with capital invested. Profit margin instead compares an operating result with the related revenue.
How is a return annualized?
The calculator spreads total growth geometrically across the holding period entered. This makes periods of different lengths easier to compare.
Can ROI be negative?
Yes. If final value including cash received is below the initial investment, the calculator shows a loss and a negative ROI.
How should I handle multiple deposits and withdrawals?
Additional cash received can be combined. Multiple investments made at different times cannot be measured correctly with this simple ROI model; a cash-flow return such as IRR is needed.
Why does ROI not account for risk?
ROI describes only the relationship between result and initial investment. Volatility, default risk, inflation, taxes, and the exact timing of payments are not evaluated.