ROI Calculator.

Guide

How to use the ROI Calculator

1. Answer What are you measuring? Pick An investment for anything you put money into and later got money out of: a stock, a rental, equipment, a car you flipped. Pick A marketing campaign for judging an ad campaign, where revenue is not profit.
2. For an investment, enter the Amount invested, including purchase costs, then the Amount returned: the final value plus anything you took out along the way. If you sold for $12,000 and collected $2,000 in rent, that is $14,000.
3. Enter the holding period in the Length (years) field and the + months field beside it. Without it, a 40% gain over 30 months looks identical to one over 10 years.
4. For a campaign, enter the Ad spend (what the platforms billed you) and Other campaign costs (agency fees, creative, tools), which most people forget, then the Revenue the campaign produced.
5. Enter the Gross margin on that revenue: what is left of each sales dollar after the direct cost of the product or service. Buy at $60, sell at $100, and your margin is 40%.
6. Read the results. For an investment, Annualized ROI is the number to compare against other options. For a campaign, check ROAS against Break-even ROAS first.

How the math works

ROI answers one question: for every dollar you put in, how much profit came back? It is the gain divided by the cost, as a percentage. A 40% ROI means each dollar returned the dollar plus 40 cents.

Plain ROI ignores time. Annualized ROI asks what steady yearly rate, compounding on itself, would turn the amount invested into the amount returned over the holding period. Simple annual ROI just divides total ROI by the years and ignores compounding.

The marketing mode starts from revenue and works down to profit: revenue times gross margin is gross profit, minus every campaign cost is net profit, over total cost is ROI. ROAS, return on ad spend, is what the platforms report: revenue divided by ad spend, with no margin and no other costs in it.

Worked example

Investment mode. You invest $10,000 and get back $14,000 after 2 years 6 months. The net gain is $4,000 and the ROI is 4,000 ÷ 10,000 = 40%.

For the annualized figure, 14,000 ÷ 10,000 = 1.4, and 1.4^(1 ÷ 2.5) = 1.1441, so the annualized ROI is 14.41% a year. The simple annual ROI is 40% ÷ 2.5 = 16%. Had the same gain taken 5 years, the annualized ROI would be 6.96%.

Marketing campaign mode. You spent $5,000 on ads and $1,000 on an agency fee and creative. The campaign produced $30,000 in revenue at a 40% gross margin.

Line	Calculation	Result
Total cost	5,000 + 1,000	$6,000
Gross profit	30,000 × 0.40	$12,000
Net profit	12,000 − 6,000	$6,000
ROI	6,000 ÷ 6,000	100%
ROAS	30,000 ÷ 5,000	6.0
Break-even ROAS	1 ÷ 0.40	2.5
Break-even revenue	6,000 ÷ 0.40	$15,000

This campaign doubled its money: every dollar of total cost came back as two. The ad dashboard would show a 6.0 ROAS, and here that is genuinely good, because break-even is 2.5. The calculator writes these as 6.00× and 2.50×.

ROAS is not profit, and why margin decides everything

ROAS is the number ad platforms put in big type, and the number most likely to mislead you. It compares revenue to ad spend, but revenue is not yours to keep; you still have to pay for what you sold. Whether a ROAS is a win depends entirely on your margin.

Take a 3.0 ROAS, which sounds healthy, at a 25% gross margin. Every $1 of ad spend brings in $3 of revenue, but only 25% of that, 75 cents, is gross profit. You spent a dollar to earn 75 cents: a 25% loss before you count an agency fee or an hour of your time.

Spend $5,000 that way, ring up $15,000 in sales, and you are $1,250 poorer. Scale the budget and you scale the loss.

Break-even ROAS is the fix: 1 divided by your margin, the point where gross profit exactly covers ad spend.

Gross margin	Break-even ROAS
20%	5.00
25%	4.00
40%	2.50
50%	2.00
60%	1.67

A 2.0 ROAS is a loss for the 25%-margin retailer and a 20% profit for a 60%-margin service business. One number can never tell two businesses the same thing. Know your break-even ROAS before you open the ad dashboard, and judge every campaign against it, not zero.

One more detail: break-even ROAS covers ad spend only. Add other costs and the revenue you need rises, which is why the example's $15,000 break-even revenue on $5,000 of spend is really a 3.0 ROAS.

Common mistakes in both modes

Using the gross sale price as the return. The amount returned on a rental you sold is the sale price plus rent collected, minus selling costs; the amount invested includes closing costs and repairs.

Comparing plain ROI across different time spans. A 40% ROI over 2.5 years (14.41% annualized) beats a 40% ROI over 10 years (3.42% annualized) by a mile.

Leaving Other campaign costs at zero. An agency fee, a video shoot and a landing-page tool are real costs; leaving them out can make a losing campaign look like a break-even one.

Counting revenue the campaign did not cause. If a customer who was already going to buy clicks an ad on the way in, the platform claims that sale. Where you can, trace revenue through a coupon code, a dedicated phone number or a lift over the prior period.

The Compound Interest Calculator shows what an annualized ROI does to a balance over time; the Percentage Calculator handles plain percent changes.

What this calculator doesn't do

It does not account for taxes on gains, for the risk you took, or for cash flows that arrived at different times. In marketing mode it treats all revenue as landing in the campaign window and ignores repeat purchases, so a campaign that wins repeat customers looks worse here than it is.

Results are estimates. Your accountant's figures, your ad platform's billing and the tax authority's rules govern.

Frequently asked questions

Estimates for planning only. Your lender, dealer or tax authority sets the real numbers, and rates, fees and rules change. This is not financial, tax or legal advice. Nothing you type here leaves your browser. See the terms of use.