Guide to Calculating Return on Investment (ROI)

Know the basics of ROI

You can use a simple online calculator to determine ROI.

I recommend: Enter your information at Give-to-Get Marketing.

Consider using the "net present value"

Cash today is generally worth more than cash tomorrow due to inflation, so you may want to include that cost in your calculations. Doing so gives you the "net present value" (NPV) of a project, which is somewhat more accurate than ROI.

I recommend: Use Investopedia's NPV calculator. Odellion Research sells an ROI calculator that includes a discount rate as well as customizable calculators for your specific needs. Solutions Matrix also sells a range of simple to advanced ROI calculators.

Find a calculator built for your needs

For many projects, you'll have to consider all sorts of variables to end up with an accurate ROI. Luckily, there are also a variety of specialized calculators.

I recommend: Visa offers an online calculator determining whether to accept credit cards at your drive-thru and one that will tell you whether wireless handheld devices for credit card sales are worth using. Keywordtool's calculator shows which keywords and search engine results are converted into sales. Compare which employee training programs deliver a larger ROI with Mediapro. Check out Intel's online calculator to determine whether you need new computers. (Not surprisingly, these calculators are usually provided by companies that sell these services.)