The formula, without the mystery.
ROI = (total proceeds − investment cost) / investment cost
A worked example
An investment of 10,000 returning 12,500 produces a 2,500 net gain and 25% ROI. If it returns 8,000 instead, the loss is 2,000 and ROI is −20%.
Can I compare investments of different durations?
Not directly. A 25% return over three years differs from 25% over one year. This tool does not annualize returns or account for the timing of cash flows.
Keep the assumptions consistent
Use one planning period and one currency. Enter amounts consistently excluding sales tax or VAT. These simplified models do not account for uncertainty, inventory limits, working capital or progressive taxes. Results are planning estimates.