ROI (Return on Investment) measures the profit or loss relative to the original cost.

ROI vs annualized return?

ROI is total return, while annualized return is the average yearly return.

Depends on investment type. Generally 10-15% annually is good for stocks.

ROI Calculator | CalcMoney

ROI Calculator: Evaluate Your Investment Decisions

Return on Investment (ROI) is the primary metric for evaluating any financial decision. Is this investment worth it? Is it better than the alternative? ROI answers with a clear percentage.

The Basic ROI Formula

**ROI = (Net Profit ÷ Investment Cost) × 100**

Example: You invested EGP 100,000 and made a net profit of EGP 25,000: ROI = (25,000 ÷ 100,000) × 100 = **25%**

CAGR: Compound Annual Growth Rate

Simple ROI does not account for time. CAGR gives you the average annual growth rate of a multi-year investment.

**CAGR = ((Final Value ÷ Initial Value) ^ (1 ÷ Years)) - 1**

Example: An investment that grew from EGP 100,000 to 200,000 over 5 years: CAGR = ((200,000 ÷ 100,000) ^ (1/5)) - 1 = 14.87% per year

Comparing Investment Types by ROI

In the Egyptian context, historical average returns: - Savings certificates (2024): 20–27% annually - Egyptian stock market (10-year average): 15–20% annually in pounds - Cairo metropolitan real estate: 10–20% annually (rent + appreciation) - Gold: tied to the dollar and volatile

ROI in Business

ROI is not limited to financial investments. It can be measured for: - **Marketing ad:** Profit generated from the ad ÷ ad cost - **Employee training:** Productivity increase ÷ training cost - **New equipment:** Cost savings ÷ equipment price

Limitations of the ROI Metric

Does not account for time (50% ROI in one year beats 50% ROI over 10 years)
Does not consider risk (30% ROI with high risk may be worse than 20% with low risk)
Does not automatically adjust for inflation

Use our calculator to compute ROI, CAGR, and inflation-adjusted ROI for any investment.

FAQ

What is a good ROI in the Egyptian context?▼

In a high-inflation environment, a good ROI must exceed the inflation rate. If inflation is 30%, an ROI below that means real purchasing power loss. Aim for ROI exceeding inflation by at least 5–10%.

What is the difference between ROI and IRR?▼

ROI is a simple profit ratio metric. IRR (Internal Rate of Return) is more complex and accounts for the timing of cash flows, making it more accurate for projects with multiple, varying cash flows.

How do I calculate ROI on a real estate investment?▼

Real estate ROI = (Annual rental income + Property value appreciation − Annual expenses) ÷ Purchase price × 100. Include all expenses: maintenance, taxes, brokerage, and vacancy periods.

Does ROI account for taxes?▼

Gross ROI does not include taxes. For accurate analysis, calculate after-tax ROI by subtracting the tax amount from net profit before computing the ratio.

How do I compare investments with different time periods?▼

Use CAGR instead of ROI for fair comparison. CAGR converts returns to a unified annual rate that can be compared regardless of investment duration.

ROI Calculator

Return on Investment