Canonical formula calculator
RETURN ON INVESTMENT
The percent gain or loss on what you put in — the foundational test for whether a decision created value or destroyed it.
Worked example
How the number is worked out
A landscaper weighing up the second-hand mini-digger they bought last year.
Starting from
Working
Thirty percent back on the money put in. ROI carries no clock — 30% over one year and 30% over four are the same figure here and completely different decisions.
What this tells you
Return on Investment measures the percent gain or loss on capital you put to work. A 30% ROI on a marketing campaign means you got back $1.30 for every dollar spent — after the spend, profit was 30%. ROI is the most universal way to compare investment options across very different categories: a $10K ad campaign at 40% ROI is comparable to a $50K equipment purchase at 35% ROI.
When to use it
Calculate ROI for any discrete investment — a marketing campaign, a piece of equipment, a hire, a software purchase. Compare across investments to find your highest-leverage capital allocations. The trap to avoid: comparing ROI without considering risk, time horizon, or scalability — a 100% ROI on a $1K test is not the same as a 100% ROI on a $100K commitment.
What it doesn’t tell you
ROI is a single-point measurement. It does not account for the time it took to realize the return, the risk involved, or the lost opportunity of capital tied up. A 50% ROI over 5 years is much weaker than a 50% ROI over 6 months. For investments with long horizons, consider annualized ROI or IRR instead.
Reckon it, don’t just calc it
A calculator gives you today’s number. Reckon takes your plan to make your own money and checks it against what’s real — your margin, your price, what it takes to hit the take-home you want. No AI, no guessing — the same input always gives the same answer.