What is a good ROI?▾
It should beat your cost of capital and safer alternatives. If a fixed deposit pays 7%, a business investment with similar risk should return clearly more than 7% a year.
Why annualise ROI?▾
A 50% ROI over 5 years is only about 8.4% a year, while 30% in one year is far better. Annualising makes them comparable.
How is ROI different from IRR?▾
ROI looks at a single amount in and out. IRR handles many cash flows at different times — use the NPV/IRR or XIRR calculator for those.
How do I calculate marketing ROI?▾
Use the gross profit generated by the campaign as the return, not revenue, and include all campaign costs as the investment.
