Free Tool — ROI Calculator
ROI Calculator
Enter what you put in and what you got back — see net profit, ROI % and the annualized return for the period.
Net profit
₹40,000.00
ROI
40%
Annualized ROI
18.32%
ROI = (returned − invested) ÷ invested × 100. Annualized ROI smooths the same return over the holding period so you can compare investments of different lengths.
Why ROI matters for every business decision
Whether it's new kitchen equipment, a marketing campaign, or stock for the season, every rupee you deploy should earn its keep. ROI puts all of those choices on one scale: what did the money return relative to what it cost?
The plain ROI percentage tells you the total gain. The annualized figure matters when comparing options with different timelines — a 40% return over 4 years is much weaker than 25% in one year. Enter the holding period and this calculator computes both.
ROI formula
Net profit = Amount returned − Amount invested. ROI % = (Amount returned − Amount invested) ÷ Amount invested × 100. Annualized ROI % = ((Amount returned ÷ Amount invested)^(1 ÷ Holding period in years) − 1) × 100. The annualized figure is shown only when the holding period is above zero.
How to use the ROI calculator
- 1Enter the amount invested: the full cost of the machine, campaign, renovation or stock you are judging.
- 2Enter the amount returned: the total money that came back, not just the gain. If you put in ₹1,00,000 and earned ₹30,000 on top, enter ₹1,30,000.
- 3Enter the holding period in years to get the annualized figure. Use decimals for part-years, such as 0.5 for six months, or clear the field if you only need total ROI.
- 4Read the net profit (labelled net loss if you got back less than you put in), the ROI % and the annualized ROI %. All three update as you type.
- 5Change one figure at a time to compare options, such as a cheaper machine that returns less, or the same spend over a shorter period.
Worked example: a ₹2,00,000 coffee machine over 3 years
A café buys an espresso machine for ₹2,00,000. Over three years the extra coffee sales add ₹2,40,000 of profit after beans, milk and staff time, and the machine can be sold for ₹50,000 at the end, so ₹2,90,000 comes back in total. Enter ₹2,00,000 as invested, ₹2,90,000 as returned and 3 years as the holding period. The ROI calculator shows a net profit of ₹90,000, an ROI of 45% and an annualized ROI of 13.19%. That is lower than 45 ÷ 3 = 15% because the yearly rate compounds: 1.1319 × 1.1319 × 1.1319 ≈ 1.45.
Now compare ₹50,000 of extra festive stock that brings in ₹60,000 within six months. With a holding period of 0.5 years, ROI is 20% but annualized ROI is 44%, since 1.20 × 1.20 = 1.44. Per year the stock looks far better, but only if you can repeat that turnaround twice a year. For projects where cash arrives unevenly over many years, also look at the payback period and net present value.
Tips for an honest ROI figure
- Enter the total amount returned, including the cost you recovered, not just the net gain. Typing only the gain can make a good investment look like a loss.
- Use profit, not sales, as the return. ₹1,00,000 of extra sales at a 30% gross margin brings back only ₹30,000.
- Count one-time costs that are easy to forget, such as delivery, installation, staff training and any GST you cannot claim back as input tax credit.
- Compare options on annualized ROI when their timelines differ, and on total ROI only when they run for the same period.
- Work out ROI twice, once with a cautious return and once with your expected return, so you know how much room for error the decision has.
Related calculators and tools
Use these alongside ROI when you weigh up a spend.
ROI calculator FAQs
ROI = (amount returned − amount invested) ÷ amount invested × 100. Invest ₹1,00,000 and get back ₹1,40,000, and your ROI is 40%.
It converts a total return into a per-year compound rate: (returned ÷ invested)^(1 ÷ years) − 1. A 40% total return over 2 years is about 18.3% per year — useful for comparing investments of different lengths.
It depends on the risk and your alternatives. As a rough bar, an investment should beat what the same money could earn safely (bank FD rates) by a wide enough margin to justify the effort and risk — many small-business owners look for 15–30%+ annually on operational investments.
Include them in the invested amount, or subtract them from the returned amount — either way, ROI is only as honest as the numbers you feed it. For marketing, our CAC calculator complements this by tracking cost per customer.
ROI tells you how much an investment earned in total compared with what it cost. Payback period tells you how long it takes for the money coming back to equal the money you spent. A machine can have a high ROI but a long payback, which matters when cash is tight. This calculator gives total and annualized ROI. For a rough payback figure, divide the cost by the cash the investment brings in each year, if that cash is fairly even.
Yes. Enter the holding period as a decimal, such as 0.5 for six months or 0.25 for three months. For a gain, the annualized ROI will then be higher than the total ROI, because it assumes you could repeat the same return, compounded, for a full year. A loss looks worse once annualized. Use the figure to compare options, not as a promised yearly return.
It means you got back less than you put in. The first result switches to Net loss and the ROI shows as a negative percentage. For example, investing ₹1,00,000 and getting back ₹85,000 gives a net loss of ₹15,000 and an ROI of −15%. A negative figure early in an investment is not always final, so check whether returns are still coming in.
No. ROI compares profit with the money you invested, while profit margin compares profit with your sales. Say a shop spends ₹50,000 on a display fridge, and over the fridge's life the extra drinks it sells bring back ₹70,000 after the cost of the drinks. The ROI is 40%, because (70,000 − 50,000) ÷ 50,000 = 0.4, whatever margin the shop makes on each bottle. Use ROI to judge spending and margin to judge pricing.
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