How Return on Investment is calculated
ROI measures net gain or loss relative to the amount originally invested. Toolmera calculates Net Gain = Amount Returned − Amount Invested, then ROI = Net Gain ÷ Amount Invested × 100.
A positive result represents a gain relative to the starting cost; a negative result represents a loss.
Net gain/lossAmount Returned − Amount Invested
ROI(Net Gain ÷ Amount Invested) × 100
Simple ROI vs. annualized ROI
Simple ROI ignores how long the result took to achieve. A 50% gain over one year and a 50% gain over ten years have the same simple ROI even though their annualized growth rates are very different.
When a positive duration and positive ending value are provided, Toolmera also shows the compounded annualized rate implied by the start and end values.
What the calculator does not include automatically
ROI can be used for investments, business projects or marketing spend, but the quality of the result depends on what you include in the returned value and investment cost.
Taxes, fees, operating expenses and other costs are not added automatically. Include them in your own input assumptions when they matter.