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How to calculate ROI in Excel and Google Sheets
Topic:Finance basicsExcel & Google Sheets
=(B2-A2)/A2✓
Verified example
Computed by a real spreadsheet engine on the sample data below.
| Initial Investment | Final Value | ROI |
| 1000 | 1300 | |
| 5000 | 4500 | |
| 2000 | 2800 | |
| 10000 | 15000 |
=(B2-A2)/A2→0.3
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Step by step
- 1Create two columns: Initial Investment / Cost (A) and Final Value or Return (B).
- 2In the ROI column, enter =(B2-A2)/A2. This divides the net gain (B2 minus A2) by the initial investment.
- 3Format the result as Percentage. A positive value indicates a gain; negative indicates a loss.
Tips
- To annualize ROI over multiple years, use: =((B2/A2)^(1/years))-1, which gives the compound annual growth rate (CAGR) instead.
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Frequently asked
What is a good ROI?
It depends on the context. Stock market investments average around 7–10% annually. Real estate, marketing, and business investments vary widely.
How do I calculate ROI when there are multiple cash flows?
Use NPV to find the net present value of all cash flows, then compute ROI as NPV divided by the initial investment.
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