ROI Calculator

ROI measures the profitability of an investment relative to its cost. It's expressed as a percentage: ROI = (Net Profit ÷ Cost of Investment) × 100. An ROI of 200% means you earned $2 for every $1 invested. It's one of the most widely used metrics for evaluating business decisions, marketing campaigns, and investment opportunities.

The basic formula is: ROI = ((Revenue from Investment − Cost of Investment) ÷ Cost of Investment) × 100. For example, if you spent $5,000 on a marketing campaign and generated $15,000 in revenue, your ROI is (($15,000 − $5,000) ÷ $5,000) × 100 = 200%.

It depends on the context. For marketing campaigns, a 5:1 return (400% ROI) is considered strong, while 2:1 (100% ROI) is the minimum threshold for most businesses. For overall business ROI, venture investors typically target 10× returns. For individual projects, any positive ROI above your cost of capital is value-creating.

ROI (Return on Investment) accounts for all costs including overhead, salaries, and tools—it gives you true profitability. ROAS (Return on Ad Spend) only measures revenue relative to ad spend, ignoring other costs. A campaign can have a great ROAS (5:1) but poor ROI once you factor in the team, tools, and time required to run it.

Standard ROI doesn't factor in time, which is a limitation. A 50% ROI in 6 months is much better than 50% over 3 years. For time-adjusted comparisons, use annualized ROI: ((1 + ROI)^(1/years) − 1) × 100. This lets you fairly compare investments with different timeframes.

Yes—a negative ROI means your investment lost money. If you spent $10,000 and only generated $7,000 in returns, your ROI is −30%. Negative ROI isn't always a failure though; some investments (like brand building or R&D) take time to generate returns and may show negative ROI in early periods before turning positive.

Marketing ROI = ((Revenue Attributed to Campaign − Campaign Cost) ÷ Campaign Cost) × 100. The challenge is attribution—accurately tracking which revenue came from which campaign. Use UTM parameters, conversion tracking, and attribution models to connect spend to results. Include all costs: ad spend, creative production, team time, and tools.

Common mistakes include: forgetting to include all costs (only counting ad spend, not team time or tools), using revenue instead of profit, not accounting for the time value of money, ignoring opportunity cost (what you could have earned investing elsewhere), and using projected instead of actual results for decision-making.