Measure investment effectiveness with a simple percentage return framework.
Overview
ROI converts profit relative to invested capital into a comparable percentage.
It is often used to compare projects with different absolute size.
Raw ROI should be paired with timeline and risk context for better decisions.
Use this tool to quickly screen opportunities before deeper analysis.
Steps
Input total amount invested.
Use current or exit value.
Use net figures for realistic ROI.
Review percentage return.
Evaluate multiple opportunities on same basis.
Math
ROI = (Final Value - Initial Cost) / Initial Cost × 100%
ROI measures net gain as a proportion of original invested amount.
Worked cases
ROI = (25,000 - 20,000) / 20,000 × 100
ROI is 25%.
Use net final value after costs.
ROI is lower than gross estimate.
ROI = (18,000 - 20,000)/20,000 × 100
ROI is -10%.
Why use this
Questions