ROI & Break-Even Calculator – Investment Return & Margin
What is Return on Investment (ROI)?
Return on Investment (ROI) is a fundamental financial profitability metric used to evaluate the efficiency and yield of an investment. It measures the net gain or loss generated relative to the initial cost.
Formula:
ROI = (Net Return / Cost of Investment) × 100%
Why Annualized ROI matters
Comparing two investments requires taking time duration into account. An investment that yields 50% over 10 years has an annualized return of only ~4.1%, whereas an investment yielding 25% over 1 year is dramatically more profitable per unit of time.
Frequently asked questions
What is considered a good ROI?
An annual ROI above 7–10% is generally considered solid for equity markets (matching historical S&P 500 returns). High-risk ventures or startups often target 25–50%+ annual ROI.
Can ROI be negative?
Yes. If total return is less than initial cost, the ROI percentage is negative, representing an overall financial loss.