Ever wonder if that business idea, stock, or marketing campaign really paid off? That’s where ROI comes in. It’s a quick and easy way to figure out how much you earned compared to how much you spent.
Let’s break it down in a fun and simple way!
Table of Contents
📚 What Is ROI?
ROI stands for Return on Investment. It tells you how much profit (or loss) you made from an investment, compared to what you spent.
It’s like asking: “For every dollar I put in, how much did I get back?”
🔢 The Simple ROI Formula
Here’s the basic math:
ROI = (Gain from Investment – Cost of Investment) ÷ Cost of Investment × 100
This gives you a percentage, which is nice because it’s easy to compare different investments.
🧮 Example: A Lemonade Stand
Let’s say you spent $100 to start a lemonade stand. After selling lemonade, you made $150 total.
- Gain from investment = $150
- Cost of investment = $100
Plug it into the formula:
ROI = (150 – 100) ÷ 100 × 100 = 50%
🎉 You made a 50% return on your investment!
📉 What If You Lose Money?
If your ROI is negative, that means you lost money. 😬
Let’s say you spent $200 on an ad campaign, but only made $150 from it:
ROI = (150 – 200) ÷ 200 × 100 = -25%
That’s a -25% ROI. Not great—but helpful to know so you can adjust next time.
🛠️ ROI Calculator
Enter the Cost of Investment, Gain and the tool will calculate ROI
✨ Why ROI Is Super Useful
ROI helps you:
- 💸 See if your money was well spent
- 📊 Compare different investments or projects
- 🚀 Make smarter decisions next time
You can use ROI for just about anything—business ideas, real estate, marketing, even buying new tools for your side hustle.
✅ Quick Recap
- ROI shows how much profit (or loss) you made
- Use this formula: (Gain – Cost) ÷ Cost × 100
- Positive ROI = profit 🎉
- Negative ROI = loss 😬
ROI is like a money scorecard 💳—and now you know how to read it!