Return on investment calculator
Our Return on Investment (ROI) calculator lets you see how your investment has performed over time.
-
-
-
What is ROI?
ROI (Return on Investment) is a simple, widely used metric that helps you assess how profitable an investment is.
Whether you're putting money into a business, property, marketing, or anything else, ROI gives you a quick overview of how much return you're getting for the money you’ve invested.
Why Use ROI?
ROI is a popular decision-making tool because it’s:
Straightforward to calculate
Easy to understand
Useful across a wide range of industries
It allows you to compare different opportunities, even across different sectors by showing how much return you make for every pound spent.
ROI Formula
The standard ROI formula is: ROI = (Gain from Investment – Cost of Investment) / Cost of Investment
For example, if you invested £50,000 and earned £70,000, your ROI would be: (£70,000 – £50,000) / £50,000 = 0.40 → 40% ROI
This means you’ve made a 40% return on your investment.
Things to keep in mind with ROI
No Time Factor: ROI doesn’t consider how long the return took. A 40% return in 6 months is better than 40% over 5 years—but ROI alone doesn’t show that.
Variable Inputs: People often define 'cost' and 'gain' differently. Some include taxes, fees, or ongoing costs—others don’t. Be consistent in how you calculate.
Not a Full Picture: ROI is just a starting point. To fully understand an investment’s potential, consider other factors like risk, time, and ongoing value.
What is Annualised ROI?
To compare investments fairly over time, use annualised ROI. This adjusts the return based on the length of time involved. A 100% ROI over 10 years isn’t as strong as a 30% return in 12 months—and annualised ROI helps highlight that.
ROI Summary
ROI is a great first step when evaluating investments, but it's best used alongside other measures. Always consider the timeframe, the level of risk, and any additional costs before making a decision.
Learn more about investing by browsing our investing knowledge hub.
