Return On Investment Calculator

The ROI, also known as Return On Investment, -Calculator helps you to calculate if your earnings are enough to recover initial investments. It is importan
investments can be earned back by the new product.

Tips for use

You can use the ROI calculator yourself but it is useful to get help from someone who has deeper financial knowledge, such as someone from your financ
have one).
You can use the ROI calculator if you make an investment for your first product or service. With the ROI calculator you calculate whether you will earn ba
the sale of this product or service.
Do you already have existing products or services and invest in an addition to your company (for example a new line). Then you can also include the inco
products/services in the Calculator.

How to use
Follow the steps to make an ROI Calculation.

The investment
Start with your initial investment. Estimate how much the new product or service will cost to develop, produce and bring to market. Think of all the costs
product or service:
-       Development
-       Buying needed machines or machine parts,
-       Costs for buildings or adjustments to buildings,
-       Costs of knowledge,
-       Other things that you will need to be able to create your product.

The investment does not include the costs for materials or personnel needed for creating a product. So only include the initial purchasing costs, not the m

Taxes
A part of your income needs to be paid to the government or state as a corporate tax, also known as income tax. This tax is applied to the net profit, so th
costs. Enter the right tax percentage for your country or region. To get a good estimate of your return on investment you have to take the taxes into acco
estimation in the Calculator.
Products
The soldthat you will earn back your investment within less than a year is slim. Therefore, a forecast is made over several years. You can
chance
years you want to calculate your return. If you choose a longer periode, keep in mind that this bears more risk since there is a higher chance
are wrong. Estimate the number of products that you will sell in each year. You can choose to estimate for one up to five years.
Keep in mind that a strong growth in sales can also lead to new costs or additional investments. For example, if you have to hire new staff to

Price
What is the price that you will ask for each product? Enter the price of your product on the sheet. Think about whether you are going to increase or decr
years. If you think that your price will change within a year then take the average price.
Costs
To get a realistic estimate of your return on investment, you also need to take into account costs. There are two types of costs:
-       Variable costs meaning those costs that only exist when a product is being made. Think of materials, production materials or labor. Enter the variab
each year.
-       Fixed costs Think of loans, insurance, rent, gas, electricity, water or phones. Fixed costs are costs that occur independent of the number of products

Return on investment and payback period

Once you have entered all the necessary information, the Excel sheet gives you the results. The Excel also shows you the development of th
estimated payback period.
the return of investment shows a percentage it means that at the end of the period you have earned back your investment and even more tha
you made a € 1,000 investment and the return on investment shows 75%, you have earned back the € 1,000 and at the end of the period yo
The second result shows you the payback period. If it says that “the investment is not earned back”, it means that you did not make enough m
period to cover the initial investments. When the payback period shows a number it means that within that number of years the investment is
Since the calculations are based on estimations, there is no way in saying if this will be the actual return and payback period. However, it does give an ind
profitable idea or not. It can also show you that you need to adjust your price or increase your sales effort.
return on investment analysis name

RETURN ON INVESTMENT
851%

PAYBACK PERIOD CUMULATIV

3.6 year 10000000000

8000000000

INITIAL INVESTMENT VND 900,000,000 6000000000

TAX 0%
4000000000
YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
Products sold VND 3,000 VND 4,500 VND 9,000 VND 18,900 VND 39,690 2000000000
Price VND 347,640 VND 347,640 VND 347,640 VND 347,640 VND 347,640
Revenue VND 1,042,920,000 VND 1,564,380,000 VND 3,128,760,000 VND 6,570,396,000 VND 13,797,831,600 0
YEAR 1 YEAR 2
Variable cost per product VND 400,000 VND 244,444 VND 188,888 VND 79,365 VND 40,404 -2000000000
Total variable cost VND 1,200,000,000 VND 1,099,998,000 VND 1,699,992,000 VND 1,499,998,500 VND 1,603,634,760
Fixed costs VND 417,168,000 VND 625,752,000 VND 1,251,504,000 VND 2,628,158,400 VND 5,519,132,640 -4000000000
Total costs VND 1,617,168,000 VND 1,725,750,000 VND 2,951,496,000 VND 4,128,156,900 VND 7,122,767,400

Earnings before tax -VND 574,248,000 -VND 161,370,000 VND 177,264,000 VND 2,442,239,100 VND 6,675,064,200
Tax VND 0 VND 0 VND 0 VND 0 VND 0
Earnings after tax -VND 574,248,000 -VND 161,370,000 VND 177,264,000 VND 2,442,239,100 VND 6,675,064,200 Revenue Total costs

Initial investment -VND 900,000,000 16000000000

CUMULATIVE CASH FLOW -VND 1,474,248,000 -VND 1,635,618,000 -VND 1,458,354,000 VND 983,885,100 VND 7,658,949,300 14000000000
12000000000
10000000000
8000000000
date
6000000000
4000000000
2000000000
0
YEAR 1 YEAR 2 YEAR 3 YEAR 4 Y
 4000000000
2000000000
0
YEAR 1 YEAR 2 YEAR 3 YEAR 4 Y

YEAR 1 YEAR 2 YEAR 3

Cumulative cash flow € 1,474,248,000- € 1,635,618,000- € 1,458,354,000-
Earnings after tax € 574,248,000- € 161,370,000- € 177,264,000
1 2 3
2.48
3.60
 CUMULATIVE CASH FLOW Earnings after tax

YEAR 2 YEAR 3 YEAR 4 YEAR 5

tal costs

EAR 3 YEAR 4 YEAR 5

EAR 3 YEAR 4 YEAR 5

YEAR 4 YEAR 5
€ 983,885,100###
€ 2,442,239,100###
4###
return on investment analysis name Freitag

RETURN ON INVESTMENT
Cumulative cash flow Earnings
122%
25000
PAYBACK PERIOD 20000
3.3 year 15000
10000
5000
0
INITIAL INVESTMENT € 15,000.00
-5000 YEAR 1 YEAR 2 YEAR 3 YEAR 4 Y
TAX 42%
-10000
YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 -15000
Products sold €500.00 €600.00 €720.00 €864.00 €1,037.00 -20000
Price €90.00 €90.00 €90.00 €90.00 €90.00
Revenue €45,000.00 €54,000.00 €64,800.00 €77,760.00 €93,330.00

Variable cost per product €45.00 €45.00 €45.00 €45.00 €45.00 Revenue Total costs
Total variable cost €22,500.00 €27,000.00 €32,400.00 €38,880.00 €46,665.00 100000
Fixed costs €20,000.00 €20,000.00 €20,000.00 €25,000.00 €25,000.00 90000
Total costs €42,500.00 €47,000.00 €52,400.00 €63,880.00 €71,665.00 80000
70000
Earnings before tax €2,500.00 €7,000.00 €12,400.00 €13,880.00 €21,665.00 60000
Tax €1,050.00 €2,940.00 €5,208.00 €5,829.60 €9,099.30 50000
Earnings after tax €1,450.00 €4,060.00 €7,192.00 €8,050.40 €12,565.70 40000
30000
Initial investment -€15,000.00 20000
CUMULATIVE CASH FLOW -€13,550.00 -€9,490.00 -€2,298.00 €5,752.40 €18,318.10 10000
0
YEAR 1 YEAR 2 YEAR 3 YEAR 4 YE

date

1.221206667 1.221206667
 YEAR 1 YEAR 2 YEAR 3
Cumulative cash flow € 13,550- € 9,490- € 2,298-
Earnings after tax € 1,450 € 4,060 € 7,192
1 2 3

3.29
 Freitag became successful with the sale of
durable handbags and backpacks made
from old truck tarpaulins. Because of the
ow Earnings after tax
success they decided to expand their
activities, now the company also produces
shirts and pants from recycled materials.
Freitag starts out with just one type of
clothing, to test the market. The ROI
calculator helps to determine whether this
is a profitable idea.

R 2 YEAR 3 YEAR 4 YEAR 5

Total costs

2 YEAR 3 YEAR 4 YEAR 5

YEAR 4 YEAR 5
€ 5,752###
€ 8,050###
4###