ROI
Calculate return on investment, annualised, on cash invested.
Introduction
Who this is for: Any investor comparing returns across different opportunities.
Why it matters: ROI is only comparable when annualised. A 40% return over four years is worse than 15% over one, but the headline figure suggests otherwise.
Typical scenario: An investor comparing a three-year refurbishment project against a one-year trade.
- Comparing total ROI across different holding periods without annualising.
- Measuring against total value rather than cash actually invested.
- Ignoring costs of sale when calculating the exit figure.
Inputs
Investment
years
Analysis
£120,000 returning £168,000 over 3 years is a total ROI of 40.0% — but the annualised (compound) return is 11.87%, which is the figure to compare against other opportunities.
This analysis provides context, not financial advice. Consult a qualified adviser before making investment decisions.
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Sensitivity
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Live Results
Total ROI
40.00%
Annualised ROI
11.87%
Profit
£48,000
Money Multiple
1.40x