Tax Calculator Sales

by

Business Investment ROI Calculator

Investment Analysis

Total Profit: $0.00
Total ROI: 0.00%
Annualized ROI: 0.00%
Investment Multiplier: 0.00x

How to Calculate Business ROI

Return on Investment (ROI) is a critical financial metric used to evaluate the efficiency of an investment or compare the efficiencies of several different investments. Whether you are marketing a new product, buying real estate, or investing in stocks, understanding your ROI helps you make data-driven decisions.

The ROI Formula

The basic formula for ROI is:

ROI = [(Current Value – Total Cost) / Total Cost] * 100

What is Annualized ROI?

While standard ROI tells you the total gain, it doesn't account for how long it took to achieve that gain. Annualized ROI solves this by providing the geometric average amount of money earned by an investment each year over a given period. This allows for an "apples-to-apples" comparison between a 6-month investment and a 5-year investment.

Practical Example

Imagine you invest $10,000 into a marketing campaign. After 2 years, that campaign has generated $15,000 in net revenue. However, you had $500 in software fees and maintenance costs.

  • Total Investment: $10,500
  • Net Profit: $4,500
  • Total ROI: 42.86%
  • Annualized ROI: 19.52%

By using this calculator, you can quickly determine if your business capital is being used effectively or if it would be better served elsewhere.

function calculateROI() { var initial = parseFloat(document.getElementById('initialInvestment').value); var final = parseFloat(document.getElementById('finalValue').value); var years = parseFloat(document.getElementById('investmentPeriod').value); var costs = parseFloat(document.getElementById('additionalCosts').value) || 0; if (isNaN(initial) || isNaN(final) || initial 0) { annualized = (Math.pow((final / totalCost), (1 / years)) – 1) * 100; } else { annualized = roi; } document.getElementById('totalProfit').innerText = "$" + netProfit.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('roiPercentage').innerText = roi.toFixed(2) + "%"; document.getElementById('annualizedROI').innerText = annualized.toFixed(2) + "%"; document.getElementById('multiplier').innerText = multiplier.toFixed(2) + "x"; document.getElementById('resultsArea').style.display = 'block'; }

Leave a Comment