ROI Calculator
Work out return on investment, annualized ROI and payback period from what you put in and what you get back, for a purchase or a customer's business case. Pick a mode: a simple ROI, a payback period from a monthly or yearly benefit, or a business case built from hours saved and extra revenue.
Your numbers
Everything it cost: price, setup, fees.
What it is worth now or paid back in total, including the original amount.
How long the money was in. Type it to see the ROI per year.
Return on investment
- Net return
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An estimate from the numbers you typed, not a forecast or financial advice.
The calculation runs in your browser and ParrotNotes does not store your numbers. They sit in the page address so you can bookmark or share the result.
How ROI is calculated
Return on investment compares what you got back with what you put in: ROI = (amount returned − amount invested) ÷ amount invested × 100. Spend $10,000, get $15,000 back and the ROI is $5,000 ÷ $10,000 = 50%. Get $8,000 back and it is −20%.
The amount returned is the whole amount, including the original investment. If you only know the profit, add the cost back first, or the ROI comes out 100 points too low. Count every cost on the way in: the price, setup, training, fees and the time it took.
Annualized ROI: the same return over different times
A 50% return is good over one year and ordinary over ten. Annualized ROI spreads the return over the years it took, compounded: (1 + ROI)^(1 ÷ years) − 1. 50% over three years is 1.5^(1/3) − 1, about 14.5% a year. Dividing 50% by 3 gives 16.7%, which overstates it because it ignores compounding.
Use the annualized figure to compare two investments held for different lengths of time, or to compare a project with a savings rate or the cost of borrowing.
Payback period
The payback period is how long the benefit takes to cover the cost: cost ÷ net benefit per month or per year. A $12,000 machine that saves $500 a month pays back in 24 months. Net means after the running costs: if the same machine costs $100 a month to service, the benefit is $400 and payback is 30 months.
Payback answers "how soon do we get our money back", which is what a buyer with a tight budget asks first. It ignores everything after that month, so a purchase that pays back fast but stops working in year two can look better than one that keeps paying for ten years. Read it next to the ROI over the full term.
An ROI business case for a customer
When you sell software, equipment or a service, the buyer's finance team wants the ROI in their numbers, not yours. The Business case mode takes the usual parts: people who use it, hours each saves a week, what an hour of their time costs, and any extra revenue, against a one-time cost and a monthly cost over the contract term.
Say 10 reps each save 2 hours a week, an hour costs the company $40 with benefits, and they work 48 weeks a year: 960 hours, worth $38,400 a year. Against $2,000 of setup and $300 a month for three years ($12,800), the three-year ROI is ($115,200 − $12,800) ÷ $12,800 = 800%, and the setup pays back in under a month.
A number that high gets questioned, so make it defensible. Use a loaded hourly cost (pay plus benefits and payroll taxes), count revenue at the margin rather than in full, pick a term the contract covers, and cut the hours saved to what the customer will stand behind. Then note where each number came from: "2 hours a week, from Dana, sales ops, on the discovery call" is harder to argue with than a round figure.
What an ROI figure leaves out
Simple ROI treats a dollar next year the same as a dollar today and says nothing about risk. For large or long projects, finance teams use net present value or internal rate of return, which discount future benefits; this calculator does not.
Hours saved are only worth their full cost if the time goes to something useful: more calls, more visits, less overtime. Soft benefits, such as fewer errors or better notes for a new hire, are real but hard to price; list them next to the ROI rather than folding a guess into it.
Before you build the business case: How to run a discovery call, Capital equipment sales, Enterprise sales, SaaS sales.
Build the business case from the discovery call
The numbers in a business case come from what the customer told you: how many people, how many hours, what an hour costs. ParrotNotes records the discovery call (with permission) and pulls those numbers into your notes, so the ROI you send back uses their figures.
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