Every financial term inside the ROIify calculator, explained in one sentence — then unpacked with a worked example. Built for UK and US small business owners. No jargon. No fluff.
What this project earns if its current pace continues for a full 12 months.
Annualised ROI rescales a short-term return so you can compare projects of different lengths on a like-for-like yearly basis. A 10% return in 3 months annualises to roughly 40% — useful for stacking a short marketing spike against a long-term equipment upgrade.
Earn 6% in 4 months → annualised ≈ 18% (6% × 12/4).
The moment total earnings catch up to total costs — neither profit nor loss.
Break-even is the tipping point where you stop being in the red. For a one-off investment it's the same as Payback. For ongoing operations it's the sales level needed to cover fixed + variable costs each month.
What it costs you, on average, to land one new paying customer.
CAC = Total Marketing Spend ÷ New Customers Acquired. Healthy SaaS aims for LTV ÷ CAC ≥ 3. For local services, payback in under 3 months tends to be sustainable.
£2,000 ad spend → 25 new customers → CAC = £80.
How many times the project's monthly cash covers the loan repayment. Banks look for ≥ 1.25×.
DSCR = Monthly Net Operating Cash ÷ Monthly Debt Repayment. It's the single most important number a UK or US bank underwriter calculates when assessing a loan application. A DSCR of 1.0 means the project just covers the loan with zero margin; 1.25× is the high-street threshold; 1.5× is preferred by British Business Bank–backed lenders.
Project nets £4,000/mo, loan repayment is £2,500/mo → DSCR = 1.60× (lender-strong).
The % of revenue you keep after paying for the product or service itself.
Gross Margin = (Revenue − Cost of Goods) ÷ Revenue × 100. Hospitality 65–75%, e-com 30–55%, professional services 70–90%. It's the ceiling on what marketing or hiring can earn.
The one-off cost to get the project off the ground — purchase, install, setup.
Includes the asset's purchase price, delivery, installation, training, and any other one-time setup cost. Excludes ongoing monthly costs — those go in Maintenance.
Total gross profit one customer generates before they leave.
LTV = Avg Order Value × Purchases per Period × Gross Margin × Retention. Marketing ROI looks dismal on a single sale but transformative once LTV is factored — a £40 acquisition that earns £180 over 12 months is a winning campaign.
Recurring costs to keep the investment running — software, repairs, supplies.
Everything that hits the bank every month because of this project: software subscriptions, service contracts, consumables, insurance. Don't double-count salaries here.
How many months until the project earns back its upfront cost.
Payback = Upfront Cost ÷ Monthly Net Cash. Shorter payback means lower risk — your money is recovered sooner. A 6-month payback on a £6,000 oven means you break even half a year after install, then everything from there is profit.
£6,000 oven generating £1,000/mo net → payback = 6 months.
The months a new hire or rollout takes to reach full productivity.
Salary is paid in full from day one, but revenue contribution scales gradually. A 3-month ramp means the hire delivers roughly half their steady-state output in Year 1. Build this in or your ROI will look too rosy.
New BDR at £4k/mo revenue with 3-month ramp → ~75% of Y1 output realised.
Revenue generated for every £1 of advertising spend.
ROAS = Revenue ÷ Ad Spend, expressed as a ratio (e.g. 4x). Unlike ROI it ignores cost of goods and margin — a 4x ROAS on a 20% margin product is actually losing money. Always pair ROAS with margin.
£1,000 ad spend → £4,000 sales → ROAS = 4x.
The profit you make for every £1 you spend, shown as a percentage.
ROI compares what you got back against what you put in. The formula is (Net Profit ÷ Cost) × 100. A 25% ROI means you earned £1.25 for every £1 invested. ROI ignores how long it took — for that, use Payback Period or Annualised ROI.
Spend £10,000, earn £12,500 back → ROI = (£2,500 ÷ £10,000) × 100 = 25%.
Re-runs the forecast with 15% lower revenue and 10% higher costs.
A pessimistic scenario stress test reveals whether a project still pays back if reality bites. If ROI stays positive under stress, you can commit with confidence. If it flips negative, the margin of safety is thin.
The cash you keep because the spend reduces your taxable profit.
Buying equipment often lets you write off the cost against profits — in the UK via the Annual Investment Allowance (AIA), in the US via Section 179. If you spend £10,000 and your tax rate is 25%, the shield is worth £2,500 — your true net cost drops to £7,500.
£10,000 spend × 25% corporation tax = £2,500 tax shield.
How busy the equipment or staff are — 100% means flat out, 50% means half idle.
Utilization scales every revenue assumption. A van running at 60% utilization earns 60% of its theoretical full-bookings revenue. Realistic figures: trades 65–80%, salons 70–85%, gyms 50–70%.
Plug your figures into the calculator and see ROI, payback and tax shield in real time.
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