How the simple ROI calculator works
ROI (return on investment) measures how much extra money an investment generates relative to its cost. The standard formula is:
ROI % = ((Total return − Initial spend) ÷ Initial spend) × 100
ROIify multiplies your monthly net benefit by your chosen horizon (12, 24 or 36 months), subtracts the initial spend, and divides by the spend. It also shows payback (how many months until the investment pays for itself) and an annualised figure so 2-year and 3-year decisions are comparable.
Worked example
You buy a £10,000 machine. You expect it to add £2,500 in extra monthly profit (after running costs) for the next 24 months. The calculator returns:
- Net gain (24 mo): £50,000
- Payback: 4.0 months
- Total ROI: +500%
- Annualised: ~145% per year
That tells you the machine pays for itself before the first financial year ends — a strong buy on cash-flow grounds alone.
When the simple calculator is enough
For quick screening — comparing two options, killing obvious losers, or giving a co-founder a 60-second answer — the simple calculator is enough. For a board paper, lender pitch or HMRC-aware decision, switch to the full industry modeler which adds running costs, depreciation, tax relief and risk-adjusted scenarios.