ROI calculator
Work out the return on any investment in seconds. Choose what you are measuring, enter your numbers, and the ROI, the net gain and the working appear as you type.
ROI calculator: three modes. Investment: enter the amount invested, the amount returned and, optionally, how long you held it, to see the ROI, net gain or loss, money multiple and annualized ROI. Marketing campaign: enter the revenue, the cost of goods and the campaign cost to see marketing ROI, profit, ROAS and break-even revenue. Time saved: enter how many people save how many hours a week, what an hour of their time costs and what the tool costs, to see first-year ROI, the saving, the hours saved and how many months it takes to pay for itself. Everything is worked out in the browser.
The Coavon team · · 11 min read
An ROI calculator divides what you gained from an investment by what it cost, and shows the result as a percentage. Enter $10,000 invested and $15,000 returned, and the ROI is 50%: you made back what you put in plus half again. The calculator above does that sum, then goes further: it annualizes the result so you can compare investments held for different lengths of time, and it has separate modes for marketing campaigns and for tools or changes that save time.
Below: how to use each mode, what every result means, worked examples, what counts as a good ROI and the mistakes that make an ROI look better or worse than it really is. For the formula itself in more depth, with ROI in Excel and Google Sheets, see our guide to the ROI formula.
How to use the ROI calculator
Pick the mode that matches what you are measuring. Each one shows its working underneath the result, so you can check the sum or copy it into a report.
Investment mode
Use it for anything you buy and later sell or value: shares, a fund, equipment, a property, a business, a course of training.
- Amount invested: everything you put in, including fees, commission, tax on purchase and running costs while you held it.
- Amount returned: what you sold it for or what it is worth today, plus any income it paid out along the way, such as dividends, rent or interest.
- Time held (optional): in years or months. Add it to see the annualized ROI, the yearly return that would have grown your money to the same amount.
Marketing campaign mode
Use it for an ad campaign, an email series, a trade show or any spend that is meant to bring in sales.
- Revenue from the campaign: the sales you can fairly attribute to it.
- Cost of the goods sold (optional): what those sales cost you to make or deliver. Leave it at 0 for a quick estimate, but the result will flatter the campaign.
- Campaign cost: ad spend plus everything else it took: agency or freelancer fees, tools, content and the time your own team spent.
Time saved mode
Use it to judge software, automation, a new process or training whose payoff is hours saved rather than money coming in.
- People and hours saved each a week: how many people it helps, and how much time it saves each of them.
- Cost of an hour of their time: pay plus overheads such as payroll taxes and benefits. If you do not know the overheads, multiplying pay by about 1.3 is a common rule of thumb.
- Cost a month and one-off cost: the subscription or running cost, plus setup, training and moving data across.
The time saved mode counts a year as 48 working weeks, to leave out holidays, and treats every saved hour as worth what it costs you. Time saved is only money saved if it goes into other useful work or reduces paid hours, so be honest about the hours you enter.
What your results mean
| Result | What it tells you | How it is worked out |
|---|---|---|
| ROI | Gain or loss as a share of what you put in | (Return − Cost) ÷ Cost × 100 |
| Net gain or loss | The profit or loss in dollars | Return − Cost |
| Annualized ROI | The steady yearly return that would give the same result | (Return ÷ Cost) ^ (1 ÷ Years) − 1 |
| Money multiple | How many times your money you got back | Return ÷ Cost |
| Marketing ROI | Profit from a campaign as a share of its cost | (Revenue − Cost of goods − Campaign cost) ÷ Campaign cost × 100 |
| ROAS | Revenue for every dollar of campaign cost, before other costs | Revenue ÷ Campaign cost |
| Break-even revenue | The revenue the campaign needs just to pay for itself | Campaign cost ÷ Profit margin on sales |
| First-year ROI (time saved) | What a year of saved hours is worth, against a year of costs | (Value of hours saved − Year’s costs) ÷ Year’s costs × 100 |
| Pays for itself in | Months until the one-off cost is covered by the monthly saving | One-off cost ÷ (Monthly saving − Monthly cost) |
A positive ROI means you got back more than you put in; a negative one means you lost money. An ROI of 0% means you broke even. Because ROI is a percentage, it lets you compare a $500 experiment with a $50,000 one on equal terms.
ROI calculator examples
An investment held for several years
You buy shares for $10,000, including fees, receive $600 in dividends while you hold them, and sell after 3 years for $14,400. The amount returned is $15,000, so the ROI is ($15,000 − $10,000) ÷ $10,000 × 100 = 50%. Over 3 years that is an annualized ROI of about 14.5% a year, the figure to compare with other investments.
Equipment for a small business
A bakery spends $6,000 on a second oven, including installation. Over 2 years it lets them sell an extra $9,000 of bread at a profit, after ingredients and staff, and the oven could be resold for $2,000. Amount invested: $6,000. Amount returned: $9,000 + $2,000 = $11,000. ROI: ($11,000 − $6,000) ÷ $6,000 × 100 = 83.3%, or about 35.4% a year over 2 years.
A marketing campaign
A campaign costs $5,000 in ads and design and brings in $20,000 of sales that cost $8,000 to deliver. Profit after costs is $20,000 − $8,000 − $5,000 = $7,000, so the marketing ROI is 140%. The ROAS is 4×: $4 of revenue for every $1 spent. With a 60% margin on sales, the campaign needed about $8,333 of revenue just to break even.
A tool that saves time
Five people each save 2 hours a week with a new project tool. Their time costs $40 an hour. The tool costs $100 a month, plus $500 to set up. Hours saved a year: 5 × 2 × 48 = 480, worth $19,200. Costs for the first year: $1,200 + $500 = $1,700. First-year ROI: ($19,200 − $1,700) ÷ $1,700 × 100 ≈ 1,029%, and it pays for itself in under half a month.
Numbers that large are common for software, which is exactly why it pays to be strict about the hours. If the honest saving is 30 minutes a person a week, the same tool returns about 182% in its first year: still worthwhile, but a very different story.
What is a good ROI?
A good ROI is one that beats what you could have done with the same money and time, for the same risk. There is no single number, but these benchmarks help:
- Long-term investments: broad US stock market indexes have historically averaged around 10% a year over long periods, before inflation. Many investors use that as the yardstick: a riskier investment should promise more, a safer one can return less.
- Business spending: compare the annualized ROI with what the money costs you, such as the interest on a loan or the return you give up by not investing it elsewhere. An investment that returns less than your cost of borrowing loses money even if its ROI is positive.
- Marketing: a positive marketing ROI after cost of goods means the campaign paid for itself. Many businesses look for campaigns that return several times their cost, but what is realistic depends on your margins and how long customers stay.
- Time-saving tools: look at the payback period as well as the ROI. A tool that pays for itself within a few months is usually an easy decision; one that takes years needs a closer look.
Always compare annualized figures. A 40% return sounds better than 25%, but not if the 40% took five years and the 25% took one.
ROI, annualized ROI, ROAS and payback compared
| Measure | Best for | What it leaves out |
|---|---|---|
| ROI | A quick, comparable view of any investment | How long it took and how risky it was |
| Annualized ROI | Comparing investments held for different lengths of time | Risk, and returns that arrive unevenly |
| ROAS | Judging ad performance quickly | Product costs and every other cost of the campaign |
| Payback period | How quickly an investment covers its cost | Everything it earns after it has paid back |
Common ROI mistakes
- Leaving out costs. Fees, setup, training, maintenance and your own team’s time all belong in the cost. Missing them makes every investment look better than it is.
- Ignoring time. A 50% ROI over one year and over ten years are very different results. Add the time held and use the annualized figure.
- Counting revenue as return. For a campaign or a product, the return is profit, not sales. Use the cost of goods field, or ROAS will pass for ROI.
- Claiming results that would have happened anyway. Only count the sales or savings the investment actually caused. Customers who would have bought without the ad are not part of its return.
- Forgetting tax and inflation. For long-term investments, the return you keep after tax and inflation can be much lower than the headline ROI.
- Comparing different risks. A guaranteed 5% and a possible 20% are not equal choices. ROI alone does not show risk.
What to count for different kinds of ROI
| What you are measuring | Count as cost | Count as return |
|---|---|---|
| Shares or funds | Purchase price, fees, commission | Sale price or current value, plus dividends |
| Rental property | Price, closing costs, repairs, mortgage interest, insurance, upkeep | Rent received after vacancies, plus the gain in value when sold |
| Equipment | Price, delivery, installation, upkeep | Extra profit it brings in or costs it saves, plus resale value |
| Marketing campaign | Ad spend, agency and freelancer fees, tools, content, staff time | Profit from the sales it brought in |
| Software or automation | Subscription, setup, training, moving data | Value of hours saved, tools it replaces, errors avoided |
| Hiring or training | Pay, overheads, recruiting or course fees, time to get up to speed | Extra work done or revenue produced, costs avoided |
| A project | Everyone’s time, materials, tools, outside help | The revenue, savings or value it delivers |
How to calculate ROI in Excel or Google Sheets
Put the amount invested in cell A2 and the amount returned in B2, then use =(B2-A2)/A2 and format the cell as a percentage. For annualized ROI with the number of years in C2, use =(B2/A2)^(1/C2)-1. Our ROI formula guide has more spreadsheet formulas, including Excel’s built-in RRI function and a sheet for comparing several investments side by side.
Tracking the ROI of your projects
The hard part of ROI is rarely the sum. It is knowing what a project really cost and what it delivered. If the investment is a project your team runs, Coavon keeps the work in one place: Flow tracks every task, and on Pro and Business plans its dashboards can total the time logged by person or project, so the cost of people’s time is something you can look up rather than guess. If you are weighing up switching tools, the savings calculator on our pricing page compares what you pay for separate tools today with one Coavon plan.
How do I calculate ROI?
Subtract the cost of the investment from what it returned, divide by the cost, and multiply by 100. Investing $10,000 and getting back $15,000 gives ($15,000 − $10,000) ÷ $10,000 × 100 = 50%.
What is a good ROI?
One that beats the alternatives available for the same risk and time. For long-term investments many people compare with broad US stock market indexes, which have historically averaged around 10% a year over long periods before inflation. For business spending, compare with what the money costs you to borrow or could earn elsewhere.
What is annualized ROI?
The steady yearly return that would turn your investment into its final value over the time you held it. It lets you compare investments held for different lengths of time. Enter the time held in the calculator to see it.
Is ROI the same as ROAS?
No. ROAS is revenue divided by ad spend and ignores every other cost. ROI is profit after all costs, divided by the cost. A campaign can have a healthy ROAS and still lose money once product costs are counted.
Can ROI be negative?
Yes. A negative ROI means you got back less than you put in. Investing $8,000 and getting back $6,800 is an ROI of −15%.
How do I calculate the ROI of software?
Estimate how many hours it saves each person a week, multiply by the number of people, the working weeks in a year and what an hour of their time costs. Compare that with a year of subscription plus setup and training. The calculator’s Time saved mode does this and shows how long the tool takes to pay for itself.
Does the calculator save my numbers?
No. Everything is worked out in your browser. Nothing you enter is saved or sent anywhere.