ROI Analysis

Measure the efficiency of your capital. Calculate total ROI and annualized returns to compare investment performance across different timeframes.

ROI Analysis Calculator

Investment Capital

Enter the initial cost and current/final value of your investment.

ROI Results

25%

Net Profit: $2,500

Annualized ROI

11.8%

Average gain per year

ROI Calculation Methods

functions The Formulas

There are two main ways to look at returns. Total ROI tells you the overall growth, while Annualized ROI (CAGR) allows you to compare the efficiency of investments held for different lengths of time.

Total ROI

((Final - Initial) / Initial) × 100

Annualized ROI

((Final / Initial)^(1/Years) - 1) × 100

Performance Benchmarks

  • Above 15% AnnualizedExcellent. Outperforming major market indices.
  • 7% to 15% AnnualizedStandard. Competitive with long-term stock market averages.
  • Below 7% AnnualizedUnderperforming. May be better off in a low-risk index fund.

Built on Industry Standards

Our calculator utilizes standard financial return equations recognized by the SEC and FINRA. Annualized ROI calculations use the Geometric Mean (CAGR) method.

*Disclaimer: This tool is for educational and estimating purposes only. It does not constitute investment advice. Past performance is not indicative of future results. Actual returns will vary based on fees, taxes, and inflation.

Frequently Asked Questions

What is Return on Investment (ROI)?expand_more

ROI is a performance measure used to evaluate the efficiency or profitability of an investment. It measures the amount of return on an investment relative to the investment’s cost.

Source: Investopedia
How do I calculate ROI?expand_more

The basic ROI formula is: ROI=(Net Profit / Cost of Investment) × 100. Net profit is the current value of the investment minus the original cost.

What is a good ROI for a business?expand_more

A "good" ROI varies by industry and risk level. Generally, a 7-10% annual ROI is considered solid for long-term investments (like the S&P 500 average), while business-specific investments may target 15-30% to account for higher operational risks.

Source: SEC: Calculating Returns
Why is Annualized ROI important?expand_more

Basic ROI tells you the total gain, but Annualized ROI tells you the average gain per year. This is critical for comparing a 20% ROI over 5 years vs. a 15% ROI over 1 year—the latter is much more efficient.

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We constantly seek to improve our tools. If you faced a bug, an incorrect calculation, or have a feature request, please let us know! Send us an email and we will review and reply within 48 hours.

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