ROI Calculator
Calculate your absolute return on investment, net gains, and total costs.
Investment details
Return on Investment (ROI)
42.86%
Earned a net profit of ₹45,000.
- Initial Principal
- ₹1,00,000
- Total Auxiliary Costs
- ₹5,000
- Total Invested Base
- ₹1,05,000
- Net Profit
- ₹45,000
Working
((₹150000 − ₹105000) ÷ ₹105000) × 100 = 42.86%About this calculator
Return on Investment (ROI) is a fundamental, universally used metric to evaluate the financial efficiency and profitability of an investment. This calculator works out your net gain or loss, absolute ROI percentage, and total investment base while supporting additional costs associated with your purchase.
How to use this calculator
Enter the initial investment amount
Input the purchase price or baseline cost of the asset—such as stocks, property, business equipment, or campaign capital.
Include additional transactional costs
Add any auxiliary fees, commissions, interest charges, broker fees, or maintenance outlays incurred to acquire and hold the investment.
Enter the final value of the investment
Input the actual sale price or current market-appraised valuation of the asset to calculate your returns.
Evaluate the ROI percentage and net profit
View your absolute cash profit or capital loss, alongside your ROI percentage. The working block shows the mathematical substitution used.
Formula
ROI = [ (Final Value − Total Cost) ÷ Total Cost ] × 100- Total Cost is the sum of the Initial Investment and any Additional Costs.
- Profit or Loss is the Final Value minus the Total Cost. A negative output represents a capital loss.
- ROI expresses net returns as a percentage relative to the total money risked.
- Simple ROI does not account for time. An investment returning 50% over 10 years has the same absolute ROI as one returning 50% in 1 year, though their annual efficiency differs drastically.
Worked example
Inputs
- Initial investment: ₹10,000 (or $10,000)
- Additional transaction costs: ₹2,000
- Final appraisal value: ₹15,000
Calculation
Total Cost = 10000 + 2000 = 12000
Net Profit = 15000 - 12000 = 3000
ROI Calculation:
ROI = (3000 / 12000) * 100
= 0.25 * 100
= 25.00%Your absolute return on investment is 25.00%, resulting in a net cash profit of ₹3,000 on a total investment base of ₹12,000.
What the result means
- Total Invested is the complete cash outgo risked in this transaction, providing your absolute cost basis.
- Net Profit or Loss represents the absolute cash value generated (or lost) on the investment after clearing all costs.
- ROI Percentage represents the profitability ratio of the venture. Every ₹100 of total capital risked returned a profit of ₹25 in our example.
- Simple ROI has no temporal context. To evaluate yearly efficiency, use a compounding annualized metric like CAGR.
Related calculations
- Compare the simple ROI of various assets side-by-side to find out which venture utilized capital most efficiently.
- Calculate the compound annual growth rate (CAGR) on the same investment to understand its annualised performance over years.
- Simulate increasing or decreasing final values to determine the exact exit price required to reach your target ROI %.
Frequently asked questions
What is Return on Investment (ROI)?
Return on Investment (ROI) is a popular financial ratio used to measure the profitability of an investment relative to its cost. It is calculated by dividing the net profit of an investment by its total cost, then multiplying by 100 to get a percentage. It allows investors to compare the efficiency of different asset options on a standardized scale.
Does simple ROI account for the time period of the investment?
No, simple ROI does not account for the duration an investment is held. A 50% ROI earned over 5 years is calculated identically to a 50% ROI earned in 6 months. To compare investments with different holding periods fairly, you must calculate an annualized return metric, such as the Compound Annual Growth Rate (CAGR).
What is a good ROI for an investment?
A "good" ROI depends entirely on the asset class, risk tolerance, and holding period. Historically, the stock market averages an annualised return of around 10–12%, which is considered a strong baseline. Real estate, venture capital, and secure bonds have varying ROI expectations that correlate directly with their risk profiles.
Can Return on Investment (ROI) be negative?
Yes, ROI can easily be negative if the final liquidation value of the asset is less than the total cost of acquiring and holding it. A negative ROI represents a capital loss, indicating that the venture lost money. The maximum loss on an unleveraged investment is -100% (complete write-off).
How do additional costs affect the ROI calculation?
Additional costs such as brokerage fees, transactional taxes, maintenance, interest, and legal commissions directly increase your total cost basis. Since ROI divides net profit by total cost, any added fee simultaneously reduces your net profit and inflates the denominator, resulting in a significantly lower final ROI percentage.
What is the difference between ROI and CAGR?
Simple ROI measures the absolute total percentage growth of an investment from start to finish, completely ignoring the time taken. CAGR (Compound Annual Growth Rate) measures the annualized compounding rate of return required for an investment to grow from its initial value to its final value over a specific number of years, accounting for time.
Related calculators
CAGR Calculator
Calculate the annualised growth rate of an investment over time.
Percentage Calculator
Calculate percentages, increases, decreases and differences instantly.
Compound Interest Calculator
Calculate how your money grows with compound interest over time.
Browse all finance calculators or see the full list of calculators.