What you put in.
Total value back, including your original stake.
Used for the annualised return.
You turned £10,000 into £13,000 — a 30.0% return, or about 30.0% a year.
Invested vs returned
The gap is your net profit or loss.
How ROI is calculated
Return on investment expresses your gain as a percentage of what you put in, so you can compare very different investments on a level footing.
Net profit = Amount returned − Amount invested
ROI % = Net profit ÷ Amount invested × 100
Annualised ROI % = (Returned ÷ Invested)^(12 ÷ months) − 1
Why annualise?
A 30% return sounds great — but 30% over five years is very different from 30% in six months. The annualised figure restates the return as a yearly rate, so a quick win and a slow burn can be compared fairly. Use it whenever the time periods differ.
Frequently asked questions
What should 'amount returned' include?
The total value you get back, not just the profit — the original stake plus any gain. For a marketing spend, that's the gross profit generated; for an asset, its sale value plus any income it produced.
What's a good ROI?
It depends entirely on the risk and the alternative. Compare the annualised ROI against what the same money could earn elsewhere at similar risk. A positive ROI isn't automatically good if a safer option returns more.
Does ROI account for risk or timing of cash?
No. Simple ROI ignores risk and when cash actually arrives. For big decisions, also look at payback period and, ideally, a discounted measure like NPV alongside it.
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These calculators are for general guidance only and use the figures you enter. They are not financial, accounting or tax advice. Always check important decisions with a qualified professional.