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Project ROI Calculator

See whether a project pays off, as an ROI percentage.

How it is calculated

You enter the total benefit of the project and its total cost, both in dollars and over the same period. The tool takes the gain left after cost and divides it by the cost: net gain = total benefit − cost and ROI = (total benefit − cost) ÷ cost × 100. The benefit field is the whole value the project returned (revenue, savings), not a figure that already has the cost taken out. The cost must be above zero, otherwise there is no result. A negative ROI is shown with a minus sign and means the project returned less than it cost. ROI says nothing about how long the return took, so a 50% return over one year and over five years look the same here.

Worked example

A project cost $120,000 and is expected to bring $185,000 in total benefits. Net gain: 185,000 − 120,000 = $65,000. ROI: 65,000 ÷ 120,000 × 100 = 54.17%. For every dollar spent the project returns its dollar plus about 54 cents. If the benefit had been only $90,000, the net gain would be −$30,000 and ROI would be −25.00%.

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Common mistakes

  • Entering the net gain as the benefit. The field is the total benefit, and the cost is subtracted by the tool; subtracting it yourself too counts the cost twice and understates ROI.
  • Leaving out part of the cost, such as staff time, licences or maintenance. A lower cost makes ROI look better than it is.
  • Counting benefits and costs for different periods. A three-year benefit set against a one-year cost overstates ROI.
  • Reading ROI as a yearly rate. It covers the whole life of the project, so compare projects of different length with care.
  • Entering benefit as a percentage or as a plain count rather than in money. Both fields must be in the same currency units.

Sources

About this calculator

Project ROI (return on investment) measures whether an initiative paid off relative to what it cost, expressed as a single percentage: ROI = (Total Benefit − Cost) / Cost × 100. A positive ROI means the project returned more value than it consumed; a negative one means it cost more than it delivered.

Because it reduces a project down to one comparable number, ROI is the go-to metric project managers and executives use to justify capital spending, rank competing initiatives against each other for limited budget, or report back to stakeholders on whether a completed project was worth doing. This calculator takes the total benefit and total cost of a project and returns the ROI percentage directly. The benefit figure should be the total benefit rather than the net gain, since the cost is subtracted within the formula.

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Comments (1)

  • Editorial team

    An ROI of 150 percent in the default case means every dollar spent came back with a dollar fifty of gain on top. It is also worth running the same project with the benefit you would call pessimistic: if ROI stays above zero there, the case is sturdier than one that only works at the optimistic figure. The tool sees no timing, so a payback in two years and in ten look identical. Which period do you usually measure projects over?

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