ROI calculator
Result
Profitable
Net gain
₦12,000
Gross profit
₦112,000
Payback period
5.4 months
Annualized ROI
25.4%
Cost vs gross profit
Break-even revenue
Terms used in this calculator
- Currency
- The money symbol used for every amount in the calculation.
- Investment cost
- The main amount the business spends on the opportunity.
- Extra cost
- Additional spend tied to the investment, such as setup, tools, delivery, or fees.
- Revenue gained
- The sales or income the business expects to earn from the investment.
- Profit margin
- The percentage of revenue that remains as gross profit after direct costs.
- Investment time
- The number of months or years used to estimate payback and annualized ROI.
Gross profit
Total cost
Net gain
ROI
Break-even revenue
Return on Investment, usually shortened to ROI, helps a business compare what it spends with the profit it expects to get back. It is useful for ads, inventory, equipment, hiring, software, discounts, and expansion decisions.
The basic formula is ROI = (gain from investment - cost of investment) / cost of investment. This calculator uses revenue gained and profit margin to estimate the real gain before comparing it with the full investment cost.
ROI is a starting point, not the whole decision. A high ROI over many years may be less attractive than a smaller ROI earned quickly, so the annualized ROI and payback period help compare opportunities more clearly.