What is ROI?
ROI (return on investment) measures what an investment earned relative to its cost: (gain − cost) / cost, as a percentage. Spend $2,000 on ads that bring $6,000 of profit and the ROI is 200%. It's the common language for comparing whether money was well spent.
In practice
A contractor spends $1,500 on a website that generates $9,000 of new work: ROI = ($9,000 − $1,500) / $1,500 = 500%.
Was it worth it? Do the math
Billia's free profit margin calculator turns 'I think it worked' into a number.
Open the profit margin calculatorFrequently asked questions
What's a good ROI?
Anything positive beats losing money, but compare against alternatives — 10% on a safe investment vs. 200% on a risky one aren't directly comparable. Time period matters too.
Can ROI be negative?
Yes — a negative ROI means you lost money on the investment. A -50% ROI on $1,000 means you got $500 back.
ROI vs. profit margin?
ROI measures return on a specific investment; margin measures profitability of revenue overall. A project can have great ROI and the business still have thin margins.