ROI Calculator
ROI (Return on Investment) is a performance indicator that measures the amount of gain or loss brought by an investment relative to its cost. It is used to evaluate the efficiency of an investment.
Key Terms
- Investment Amount: The total capital spent on a project or asset.
- Total Return: The total value obtained at the end of the investment (including initial capital).
- Net Profit: The difference between Total Return and Investment Amount.
- ROI (Return on Investment): The ratio of net profit to the investment amount, expressed as a percentage (%).
ROI Formula
The standard formula used to calculate ROI is as follows:
ROI = ((Current Value of Investment - Cost of Investment) / Cost of Investment) * 100
How it is Calculated?
Suppose you spent 10,000 TL on an advertising campaign and generated 15,000 TL in sales revenue as a result:
- Net Profit: 15,000 - 10,000 = 5,000 TL
- ROI: (5,000 / 10,000) * 100 = 50%
This means you have received a 50% return on this investment. A negative result (e.g., -20%) indicates that the investment yielded less than its cost and resulted in a loss.