Investment Analysis
ROI Calculator
Measure the return on investment for any project, campaign or asset purchase, including annualised return.
insightsInvestment Profile
Total amount returned at the end of the period.
leaderboardROI Result
ROI
35.00%
Annualised
35.00%
Initial Investment£10,000.00
Final Return£13,500.00
Net Profit£3,500.00
savings
Capture Investment
Include all upfront capital — equipment, ad spend, training fees.
monitoring
Measure Return
Track the total amount the investment generated over the period.
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Compare Options
Use annualised ROI to compare investments of different lengths.
Common Questions
Why annualise ROI?expand_more
Comparing a project that returns 30% over 1 year against one that returns 60% over 5 years is misleading without normalising. Annualised ROI converts everything to an equivalent yearly rate (here, 30% beats 9.9%/year). It's especially important when comparing campaigns of different durations or pitching investors against benchmarks like the FTSE 100 (~7% annual long-term).
Is ROI the same as profit margin?expand_more
No. Margin measures profit per unit of revenue (efficiency of trading). ROI measures profit per unit of capital invested (efficiency of investment). A coffee shop with 10% margin can still deliver 80% ROI if turnover is high relative to setup cost. Use margin to judge pricing and ROI to judge whether to put money in at all.
What costs should I include in 'investment'?expand_more
Include everything you actually committed: equipment, marketing spend, your own time at a market rate, training, software subscriptions for the period, and any opportunity cost from tying up working capital. Many founders flatter their ROI by ignoring their own labour — a 50% return on £10k looks great until you realise it took 800 unpaid hours.
How does ROI differ from payback period?expand_more
Payback period asks 'when do I get my money back?' — it ignores anything that happens after break-even. ROI asks 'how much do I gain overall?' A project with 18-month payback but 5-year tail of profits has a great ROI; one with 12-month payback but no further upside has poor ROI. Use both together.
Is ROI the right metric for everything?expand_more
No. For multi-year investments with uneven cashflows, NPV (Net Present Value) and IRR (Internal Rate of Return) are more accurate because they account for the time value of money. ROI is best for shorter, simpler decisions: a marketing campaign, a piece of equipment, a stock-buying decision. For property or capital projects spanning 5+ years, ask your accountant for an IRR analysis.