How do I calculate ROI?

ROI = ((Net Profit) ÷ Cost of Investment) × 100. If you invest $10,000 and earn $13,000 back, your net profit is $3,000 and your ROI is 30%. This basic formula works for any investment type.

It depends on the investment type and risk. The S&P 500 historically returns about 10% annually. Real estate averages 8–12%. Marketing campaigns often target 5:1 ROAS (400% ROI). Any ROI above your cost of capital is technically positive.

What's the difference between ROI and annualized ROI?

Simple ROI shows total return regardless of time. Annualized ROI (CAGR) normalizes returns to a yearly rate, making it possible to compare investments held for different periods. A 50% return over 5 years is only about 8.4% annualized.

How do I calculate marketing ROI (ROAS)?

ROAS = Revenue Generated ÷ Ad Spend. If you spend $1,000 on ads and generate $5,000 in revenue, your ROAS is 5:1 or 5×. To get profit-based ROI, subtract the ad spend and cost of goods from revenue first.

Does ROI account for inflation?

Simple ROI does not. Real ROI adjusts for inflation by subtracting the inflation rate from your nominal return. A 10% nominal return with 3% inflation gives you roughly 7% real ROI: the actual increase in purchasing power.

◈Free Tool

ROI
Calculator

Calculate return on investment for any project, annualized
over time, or for marketing campaigns.

Total Ad Spend

Revenue Generated

Other Campaign Costs (optional)

Ad Space

Marketing Campaign ROI & ROAS

Campaign ROI measures profit relative to total marketing spend. ROAS measures total revenue per dollar spent.

CAMPAIGN ROI

(Revenue − Costs) ÷

Costs × 100

ROAS

Revenue ÷ Ad Spend

expressed as multiple

Marketing ROI and ROAS: Measuring What Matters

Marketing is one of the few business functions where ROI can be calculated on nearly every dollar spent. If you track it properly.

Frequently Asked Questions

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