Return on investment (ROI) calculator
ROI stands for return on investment.
ROI compares what an investment brought back with what it cost: (return − cost) ÷ cost × 100. 30% means every £1 spent brought back £1.30.
The formula
ROI = (What it brought back − what it cost) ÷ what it cost × 100
Worked example: 30.0%
The example is a UK software company in one month: £50,000 of revenue excluding VAT, 400 customers and £180,000 in the bank.
- (£26,000 − £20,000) ÷ £20,000 × 100 = 30.0%
Work out your ROI
Until you type a figure, the results show an example business. Fill in only what you know: from then on every result uses your figures alone, and nothing you type leaves your browser.
ROI for the example
Example30.0%
- (£26,000 − £20,000) ÷ £20,000 × 100 = 30.0%
Formula: (What it brought back − what it cost) ÷ what it cost × 100.
- Gain
- +£6,000
Everything your numbers show
For the example business: 29 of 29. Type your own figures to replace them. Select one for its page.
- Revenue£50,000a month
- VATValue added tax£6,000a month
- MRRMonthly recurring revenue£40,000a month
- ARRAnnual recurring revenue£480,000a year
- GMVGross merchandise value£250,000a month
- ARPUAverage revenue per user£119.62a month
- CACCustomer acquisition cost£300a customer
- LTVLifetime value£2,233a customer
- LTV:CACLifetime value to acquisition cost7.4:1
- Churn3.0%a month
- NRRNet revenue retention99.6%a month
- GRRGross revenue retention95.7%a month
- AOVAverage order value£111.11an order
- Gross margin70.0%
- EBITDAEarnings before interest, taxes, depreciation and amortisation−£4,000a month
- ROIReturn on investment30.0%
- YoYYear-on-year growth66.7%year on year
- MoMMonth-on-month growth6.4%month on month
- QoQQuarter-on-quarter growthNeeds quarterly figures
- Burn rate£9,000a month
- Runway20 months
- Operating cash flow−£7,000a month
- Profit and loss−£5,000a month
- Balance sheet£160,000Net assets
- Cash flow−£9,000a month
- COGSCost of goods sold£15,000a month
- OPEXOperating expenditure£39,000a month
- CAPEXCapital expenditure£2,000a month
- FTEFull-time equivalent8.0
How to read your result
Use the gross profit it produced as the return, not revenue, or a campaign that sells at a loss will look like a success.
Watch out for
Say over what period. A 30% return in one month and over three years are very different results.
Last checked . Estimates only, not financial, tax or legal advice: check your accounts and documents, and take advice before you act. More terms in the startup glossary.