RETURN ON INVESTMENT
If your return is $1million in 12 months on a total investment of $250,000 in the same time period, the ROI can be calculated as follows:
ROI = (Return - investment) / (Investment) x 100 or ROI = (1,000,000 - 250,000) / (250,000) x 100 = 300%
Divide the return by investment:ROI = 1,000,000 / 250,000 = 4:1
If you are trying to determine the break-even ROI, you want to find out how long it takes to make back your investment. You can calculate it in days, weeks, or months.
For break-even ROI follow this formula:ROI = (investment) / (Return) x (Time period) or ROI = (250,000) / (1,000,000) x 12 months = 3 month
More complicated versions of ROI usually involve adding elements to the return. For example, when figuring ROI on a marketing campaign, a company might value new customers higher than existing customers, on the assumption that new customers will be buy again in the future. Therefore, the new customer purchases may be be multiplied by a certain factor to reflect future returns on the investment.