ROI Analysis Calculator
Analyze return on investment and visualize payback periods for your projects
Investment Details
Total upfront cost of the investment
Expected profit or savings per year
How many years to analyze
Expected year-over-year growth in returns
Analysis Results
Enter investment details to see ROI analysis
Understanding ROI Metrics
💡 What is ROI?
Return on Investment (ROI) measures the profitability of an investment relative to its cost. Formula: (Total Returns - Investment) / Investment × 100
⏱️ Payback Period
The time it takes to recover your initial investment from the returns generated. Shorter payback periods are generally preferred.
📈 Good ROI Benchmarks
A "good" ROI varies by industry. Generally: Marketing: 5:1 ratio (500%), Equipment: 15-20% annual, Technology: 25-30% annual.
🎯 Decision Making
Consider ROI alongside other factors: risk level, time commitment, opportunity cost, and alignment with business goals.
ROI analysis calculator FAQs
Does the ROI calculation include inflation or discounting?
No. The calculator works with simple cash flows and does not discount future returns or adjust for inflation. For detailed capital budgeting, you may want to use net present value (NPV) or internal rate of return (IRR) models in a spreadsheet.
What should I do if the payback period is longer than my planning horizon?
A long or \"beyond analysis period\" payback often means the investment ties up capital for too long relative to its benefits. You can adjust assumptions, test smaller pilots, or compare with alternative projects that reach break-even sooner.
Can I compare multiple projects with this tool?
Yes. Run the calculator separately for each project and compare ROI, payback period, and cumulative returns. For a portfolio view, you can export the text report and combine the numbers in a spreadsheet or planning document.
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