Return on investment
Measure the fiscal success of your ventures. Calculate ROI, NPV, and capital payback periods with high-precision financial modeling.
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Definitions & Key Terms
Input Parameters
Initial Investment
The total upfront capital required to start the project (e.g., equipment, R&D, purchase price).
Annual Revenue
The expected yearly gross income generated by the project before expenses.
Annual Cost
Recurring yearly expenses required to operate and maintain the project (e.g., maintenance, labor, utilities).
Duration (Years)
The total lifespan of the project over which you expect to generate revenue.
Discount Rate (%)
The interest rate used to discount future cash flows to their present value. This often reflects the cost of capital, inflation, or the risk-free rate of return (e.g., US Treasury bonds).
Financial Metrics
Return on Investment (ROI)
A percentage measure of profitability. Calculated as (Net Profit / Initial Investment) × 100. A positive ROI means the investment gains money locally.
Net Present Value (NPV)
The total value of all future cash flows discounted back to today's dollars. If NPV > 0, the project is generally profitable. If NPV < 0, the project may result in a net loss in real terms.
Total Net Profit
The total absolute profit earned by the end of the project duration, not adjusted for inflation/time value of money.
Payback Period
The time it takes for the project's cumulative cash flow to turn positive, meaning you have recovered your initial investment.