ROI & Payback
Annual return on investment and payback period.
Annual return on investment and payback period.
These calculators cover general ROI, dividends, REITs, rental property, foreign investment and exit value.
Annual return on investment and payback period.
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Open calculatorThe ROI and payback calculator compares annual net profit with the initial investment. It reports annual return on investment as a percentage and a simple payback ratio in years.
Enter the initial investment and annual net profit. The calculator divides annual profit by investment to obtain ROI, then divides investment by annual profit to obtain the simple payback ratio.
Initial investment must be greater than zero. Annual net profit may be positive or negative in the engine, but a negative result represents a loss and the resulting negative payback ratio should not be interpreted as a real recovery period.
An investment of 200,000 with annual net profit of 50,000 gives ROI = 50,000 ÷ 200,000 × 100 = 25% and simple payback = 200,000 ÷ 50,000 = 4 years.
Use this as a simple screening metric. Investment decisions may also require cash-flow timing, financing costs, taxes, risk, reinvestment assumptions and other return measures.
No. This calculator uses a simple annual profit-to-investment ratio and does not discount future cash flows.
No. ROI is a percentage, while simple payback indicates how many years of the entered annual profit would equal the initial investment.
It produces a negative ROI. A negative payback ratio is mathematical output from the formula and should be treated as a loss indicator rather than a literal recovery period.
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