Treasury Practice

Calculator Corner: return on investment

Published: Apr 2022

\(\mathrm{ROI} =\frac{Final \: Value \: of \: Investment \: – \: Initial \: Value \: of \: Investment}{Cost \: of \: Investment} \times {100\%} \)

Return on Investment or ROI is calculated by subtracting the initial value of the investment from the final value of the investment (which equals the net return), then dividing this new number (the net return) by the cost of the investment, and, finally, multiplying it by 100.

Alternative method:

\(\mathrm{ROI} =\frac{Net \: Return \: on \: Investment} {Cost \: of \: Investment} \times {100\%}\)

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