ROI (Return on Investment) Calculator
Measure the profitability of your marketing campaigns and investments.
Your Return on Investment is:
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Understanding Return on Investment (ROI)
What is ROI?
Return on Investment (ROI) is a performance metric used to evaluate the efficiency or profitability of an investment. It measures the amount of return on a particular investment, relative to the investment’s cost. A high ROI means the investment’s gains compare favorably to its cost.
How to Calculate ROI
The formula for calculating ROI is a simple percentage, which this calculator handles for you:
ROI = [(Amount Gained – Amount Spent) / Amount Spent] x 100
For example, if you gained $15,000 from an investment of $5,000, your net profit is $10,000. Your ROI would be ($10,000 / $5,000) * 100, which equals 200%.
Why is ROI Important?
ROI is one of the most popular profitability metrics for a reason. It is essential for:
- Justifying Spending: It provides a clear, data-backed reason for investing in certain activities, like a specific marketing channel.
- Comparing Opportunities: ROI allows you to compare the profitability of different investments on a level playing field to decide where to allocate your budget.
- Measuring Success: It offers a simple, universally understood benchmark for the success of a project or campaign.
- Improving Performance: By tracking ROI, you can identify underperforming initiatives and optimize them to improve profitability.