ROI calculator is a kind of investment calculator which enables you to estimate the profit or loss of your investment. Return on investment calculator can also be used to compare the efficiency of a few investments. Thus, you can find the ROI formula helpful when you are going to make your financial decision. If you know how to calculate ROI, it's easier to foresee the results of an investment.
In the following part of the article you will find out:
If you're trying to decide what ROI you will get when investing time and money into building a software tool, check out the build vs. buy calculator.
Return on investment is a very popular measurement because of its simplicity and usefulness. As ROI is calculated in percentage, it's easy to compare the results of many different investments. Consequently, you are able to choose the most beneficial one. If you are involved in trade, you may also need profit margin calculator, which lets you calculate every variable in the sales process. If you want to find your sale price or, inversely, the cost you bear, you should use markup calculator.
The ROI formula is based on two pieces of information - the gain from investment and the cost of investment. The relationship is as follows:
ROI = (G-C)/C
G- gain from investment
C- cost of investment
If you have
2 000 invested and your gain from investment amounts to
5200, the equation will be:
ROI = (5200-2000) / 2000 = 160%
Remember that this metric doesn't take into consideration any risks associated with the investment.
Although ROI calculator bases its calculation on the same formula, the usage of it is much easier and faster. It's enough only to type invested amount and returned amount to get your estimated ROI. You can also use the return on investment calculator the other way round - plug in the initial principal and the percentage of estimated profit to find out what amount of money you can expect to earn.