Enter what you invested and what it's worth now to find your ROI, net profit, and annualized return over the holding period.
Return on investment (ROI) measures how much you gained or lost on an investment relative to what you put in. It is the most universal way to compare very different investments — a marketing campaign, a piece of equipment, a stock, or a whole business — on a single percentage scale.
The formula is ROI = (Final Value − Initial Investment) ÷ Initial Investment × 100. Invest $10,000 and end with $15,000 and your ROI is ($15,000 − $10,000) / $10,000 = 50%. The net profit is simply the $5,000 gain.
A 50% ROI sounds great, but earning it over one year is very different from earning it over ten. Annualized ROI accounts for time using ((Final ÷ Initial)^(1 ÷ years) − 1) × 100. A 50% total return over 3 years annualizes to about 14.5% per year. Always annualize when comparing investments held for different lengths of time.
Tip: ROI ignores risk and cash-flow timing. Two investments can share the same ROI while one is far riskier or ties up your money longer. Use ROI as a starting comparison, not the final word.
ROI is central to capital budgeting, marketing analysis, and project selection. When you cannot easily assign a final "value," estimate the total benefit an investment produces (extra revenue, cost savings, or both) and treat that as the return. For projects with cash flows over several years, also look at payback period and net present value for a fuller picture.