ROI Calculator
Calculate Return on Investment (ROI) and net financial gain or loss. Transparently account for additional ongoing expenses and returns across business or asset ventures.
Capital Valuations
0ms Local Engine₹1,00,000
+₹20,000
- Total Outlay = Initial (₹1,00,000) + Additional Costs (₹0) = ₹1,00,000
- Total Inflows = Final Value (₹1,20,000) + Additional Income (₹0) = ₹1,20,000
- Net Gain / Loss = Inflows (₹1,20,000) - Outlay (₹1,00,000) = ₹20,000
- ROI % = (₹20,000 ÷ ₹1,00,000) × 100 = 20%
Understanding Return on Investment (ROI)
Learn how to measure return on capital, factor in additional ongoing outlays, and understand the critical distinction between ROI and annualized CAGR.
1. What is Return on Investment (ROI)?
Return on Investment (ROI) is a universal profitability ratio used to evaluate the efficiency and financial gain of an investment relative to its cost basis. It measures how many rupees of net profit are generated for every rupee of capital committed.
2. Mathematical Formulas
Total Outlay = Initial Capital + Additional Costs
Total Returns = Final Value + Additional Cashflows
Net Gain / Loss = Total Returns - Total Outlay
ROI % = (Net Gain ÷ Total Outlay) × 100
Standard ROI is time-blind: a 50% ROI sounds high, but if that return took 10 years to materialize, your true annualized return (CAGR) is only 4.14% p.a., lagging even basic fixed deposits.
To evaluate compounding returns across multi-year asset holding periods, use our CAGR Calculator. For irregular cash infusions, use our XIRR Calculator.
- Overlooking Ancillary Expenses: Failing to include maintenance, renovations, commissions, software licenses, or setup costs artificially inflates reported ROI.
- Zero Capital Base: If total investment outlay is zero, percentage ROI is undefined.
Frequently Asked Questions on ROI
Everything you need to know about calculating Return on Investment and comparing capital returns.
What is the standard formula for ROI?
Does ROI take into account how long the money was invested?
How do additional costs and maintenance expenses impact ROI?
Can ROI be negative?
What is considered a good ROI in India?
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