Break-Even Calculator
How many units — and how much revenue — before you stop losing money.
ROI & Payback Period Calculator
This ROI calculator adds time, because ROI on its own ignores it. The annualised figure is the one that lets you compare investments honestly.
ROI and CAGRPayback periodAny currencyFree, no sign-up
The three ROI calculator measures
Return on investment
ROI = (Total return − Initial investment) ÷ Initial investment × 100
Invest 100,000, receive 145,000 back, and the ROI is 45%. Simple and widely quoted — and incomplete, because it says nothing about how long it took.
Annualised return (CAGR)
CAGR = ((Final ÷ Initial)1/years − 1) × 100
That same 45% over three years is a 13.19% annual compound return. Over one year it would be 45%. Over ten it would be 3.8%. Identical ROI, three completely different investments.
Payback period
Payback = Initial investment ÷ Annual cash inflow
100,000 invested returning 40,000 a year pays back in 2.5 years. This measures risk exposure rather than profitability — how long your capital is at risk before you have it back.
Always compare on the annualised figure
This is the single most useful discipline in the tool. When someone presents you with a return, the first question is "over what period?"
A 30% return sounds better than a 20% one until you learn the first took four years and the second took one. Annualised, those are 6.8% and 20% — the ranking inverts completely.
What ROI does not capture
Worth being clear, because ROI is quoted far more often than it deserves to be:
- Risk. A 15% return on a government bond and a 15% return on a speculative venture are not comparable investments.
- The timing of cash flows within the period. Money back sooner is worth more than money back later, and ROI treats them identically. For that, use net present value.
- Opportunity cost. What else you could have done with the capital.
- Reinvestment assumptions. CAGR assumes returns compound at the same rate, which real life rarely provides.
ROI is a good screening tool and a poor decision tool. Use it to rank options quickly, then look properly at the ones that survive.
Before you rely on the result
The arithmetic here is exact and has been checked against worked examples. What a calculator cannot do is know your situation — your contract, your licence category, the elections available to you, or the exceptions that might apply. It applies a formula to the figures you give it.
Use it to get a sense of scale, to sanity-check something you have been quoted, or to work a problem through for yourself. Where the number is going into a decision that matters, have the assumptions underneath it checked. That conversation is free and it usually takes twenty minutes.
Business Finance
ROI — common questions
The questions we are asked most about this calculation.
Something not covered? Ask us directly — there is no charge for a straight answer.
Subtract the initial investment from the total return, divide by the initial investment, and multiply by 100. An investment of 100,000 returning 145,000 has an ROI of 45%. The measure ignores how long it took, which is why the annualised figure matters alongside it.
It depends entirely on the risk taken, the time involved and what else you could have done with the capital. A 45% return over ten years is roughly 3.8% a year, which is poor. The same 45% over one year is excellent. Always convert to an annualised figure before judging.
ROI is the total return over the whole period, ignoring time. CAGR is the equivalent compound annual growth rate, which lets you compare investments of different lengths on a common basis. CAGR is almost always the more useful of the two for comparison.
How long it takes for cumulative cash inflows to equal the initial investment. It measures how long your capital is at risk rather than how profitable the investment is, which makes it a useful risk screen but a poor sole basis for a decision.
NPV for the decision, ROI for the screen. NPV accounts for the timing of cash flows and for your required rate of return, which ROI ignores entirely. Use ROI to rank options quickly, then run NPV on the ones worth taking seriously.
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