How do you calculate ROI?

ROI (return on investment) is your net profit divided by your total invested cost, as a percentage: ROI = (final value − total cost) ÷ total cost × 100. Total cost includes the original outlay plus any fees, brokerage or duty. Example: a Rs 506,000 cost turning into Rs 712,000 is a Rs 206,000 profit, or 40.71% ROI.

What is a good ROI percentage?

There is no single figure — it depends on risk, time and the alternative. A useful yardstick is the annualized ROI versus what you could earn safely: Sri Lankan Treasury bill yields and fixed deposits are often double-digit, so an equity or property bet should clear that to justify its risk. Always compare annualized ROI, not total ROI, across investments of different lengths.

What is the difference between ROI and ROAS?

ROI measures profit against total cost and is expressed as a percentage. ROAS (return on ad spend) measures revenue against ad cost and is expressed as a ratio, e.g. 4.0×. A 4.0× ROAS looks great, but if your gross margin is only 35% it is barely above the 2.86× break-even. ROAS ignores product cost; marketing ROI folds it back in.

How is annualized ROI different from total ROI?

Total (simple) ROI is the whole gain over the whole period, ignoring how long you waited. Annualized ROI spreads that gain into an equivalent per-year rate using (final ÷ cost)^(1/years) − 1. A 40.71% total return over two years is 18.62% per year — far more comparable across investments of different lengths.

What is break-even ROAS and how do I calculate it?

Break-even ROAS is the return on ad spend at which your campaign profit is exactly zero. It equals 1 ÷ gross margin. At a 35% margin, break-even ROAS is 1 ÷ 0.35 = 2.86×. Any ROAS above that is profitable; anything below loses money once the cost of goods is counted.

Does short-holding annualized ROI overstate returns?

Yes — annualizing a short win exaggerates it. A 10% gain over six months annualizes to 21% because the formula assumes you keep compounding at that rate all year. Treat annualized figures from very short holds with caution; they are a comparison device, not a promise the pace will continue.

Does this ROI calculator account for tax or inflation?

No. It reports gross return before capital gains tax, withholding tax or inflation. For after-tax figures use the Sri Lanka capital gains and withholding-tax calculators; for real (inflation-adjusted) return use the inflation calculator. Keeping this tool tax-free keeps the formula honest and universally comparable.

Which currencies does it support?

Rupees (LKR) by default, plus USD, EUR, GBP, INR, AUD, AED and SGD. Currency only changes how amounts are displayed — every percentage and ratio is currency-independent, so a freelancer paid in dollars and a shop owner spending rupees get the same maths.

Finance

ROI Calculator — Return on Investment, Annualized ROI & ROAS

Turn any investment or ad campaign into an honest return figure. Get net profit, simple ROI and annualized ROI for a purchase held over time — or ROAS, campaign profit and break-even ROAS for marketing spend. Multi-currency, no signup, formulae cited.

By Induwara Ashinsana— Executive Director, Ryzera TechnologiesUpdated Jul 9, 2026

ROI & ROAS CalculatorInvestment return

Formulae verified

Currency

Initial investment

What you originally put in.

Additional costs

Brokerage, stamp duty, legal, fees. Optional.

Final / current value

What it is worth now, or sold for.

Holding period(optional)

Needed only for annualized ROI.

Quick start

Net profit

Rs 206,000

Simple ROI

40.71%

Annualized ROI

18.62%

over 2 years

Gain of Rs 206,000 — 40.71% total , 18.62% per year.

Total costRs 506,000

Final valueRs 712,000

Cross-check: Rs 506,000 × (1 + 18.62%)² = Rs 712,000 ≈ final value.

Every figure is derived from your inputs using standard, cited formulae — no assumed rates of return. Full sources are listed below the calculator.

How it works

This calculator runs two standard, non-opinion return formulae. It never assumes a rate — every number you see is derived from the figures you type. There are two modes.

Investment mode

Total cost = initial investment + additional costs (brokerage, stamp duty, legal, fees). Counting costs is what separates an honest ROI from a flattering one.
Net profit = final value − total cost.
Simple ROI= net profit ÷ total cost × 100. This is the textbook definition from Brigham & Houston's Fundamentals of Financial Management.
Annualized ROI = (final value ÷ total cost)^{1 ÷ years}− 1, using the CFA Institute's geometric annualization of a holding-period return. Months are divided by 12 and days by 365.25 to get years. It is shown only when you enter a holding period. With a single entry and single exit this equals CAGR — for a growth-rate framing see the CAGR calculator linked below.

Marketing mode (ROAS)

ROAS = revenue ÷ ad spend, reported as a ratio (4.0×) and a percentage (400%). This is the primary definition used by Google Ads and Meta.
Gross profit = revenue × gross margin. ROAS on its own hides your cost of goods; margin brings it back.
Profit after ad spend = gross profit − ad spend.
Marketing ROI = profit after ad spend ÷ ad spend × 100 — the true percentage return on the money you gave the platform.
Break-even ROAS = 1 ÷ gross margin. This is the ROAS at which profit after ad spend is exactly zero: substitute revenue = ad spend × (1 ÷ margin) into the profit formula and it cancels to zero. Any ROAS above break-even is profitable; below it, you lose money once the product cost is counted.

All maths is pure and deterministic, and the two cross-checks shown in the tool — reconstructing the final value from the annualized rate, and confirming profit is zero at break-even ROAS — prove each result is self-consistent.

Worked examples

Investment · LKR

CSE shares held 2 years

Total cost: Rs 500,000 + Rs 6,000 brokerage = Rs 506,000
Net profit: Rs 712,000 − Rs 506,000 = Rs 206,000
Simple ROI: 206,000 ÷ 506,000 = 40.71%
Annualized ROI: (712,000 ÷ 506,000)^(1/2) − 1 = 18.62%
Cross-check: 506,000 × 1.1862² = 712,003 ≈ 712,000 ✓

Marketing · LKR

Facebook ad campaign

ROAS: Rs 320,000 revenue ÷ Rs 80,000 spend = 4.0× (400%)
Gross profit: 320,000 × 35% margin = Rs 112,000
Profit after ad spend: 112,000 − 80,000 = Rs 32,000
Marketing ROI: 32,000 ÷ 80,000 = 40%
Break-even ROAS: 1 ÷ 0.35 = 2.86× → 4.0× clears it, profitable ✓

Investment · LKR

Land held 5 years

Total cost: Rs 3,000,000 + Rs 200,000 (stamp duty, legal) = Rs 3,200,000
Net profit: Rs 4,900,000 − Rs 3,200,000 = Rs 1,700,000
Simple ROI: 1,700,000 ÷ 3,200,000 = 53.13%
Annualized ROI: (4,900,000 ÷ 3,200,000)^(1/5) − 1 = 8.90%
The 53% headline shrinks to a steadier 8.90% per year once time is counted.

Frequently asked questions

Sources & references

ROI is defined as net profit ÷ total invested cost (Brigham & Houston, Fundamentals of Financial Management). Break-even ROAS = 1 ÷ gross margin is an algebraic identity of the ROAS and margin definitions above. The formulae on this page were last cross-checked against these sources on 2026-07-09. Every rate is a user input — the tool supplies only the maths.

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