Calculate return on investment and payback period for a project, equipment, campaign, or expansion. Compare scenarios before committing capital.
ROI measures how much an investment returns relative to what it cost. It works as a pre-screening criterion — to quickly discard projects that clearly don't pay, or to compare two options that genuinely compete. This calculator solves the math; investment decisions that move significant capital also require risk, horizon, and opportunity cost analysis — and a conversation with a financial professional.
Financial disclaimerIndicative result — not professional financial advice. Consult a specialist before making investment or credit decisions.
Return on investment as a percentage, absolute net profit over the defined horizon, and payback period (how many months it takes to recover the invested capital). It separates total ROI from the measurement period, useful for comparing projects with different horizons.
Who it's for
For entrepreneurs and business owners evaluating equipment purchases, expansions, hires, or product launches. For operating marketing teams justifying budget against results. For project managers comparing two possible paths. For finance teams putting together preliminary comparisons before deeper discounted-flow analysis.
When to use it
Before committing capital, to validate whether the primary numbers close. After a quarter closes, to evaluate campaigns with mature cohorts. When comparing offers (buy vs rent, agency A vs agency B). To present a first business case before formal financial analysis.
When NOT to use it
Don't use it as the final decision for multi-year or high-value investments — those require net present value, internal rate of return, and assumption stress. Don't use it for personal investment (stocks, funds, real estate) without considering risk, volatility, and horizon. Don't report ROI to a formal committee without methodology audited by your CFO.
What data it needs
Initial investment
Total capital committed: equipment price, campaign budget, expansion cost, associated working capital. Include direct acquisition or launch costs.
Profit or savings generated
The amount the investment generates or saves over the defined horizon. For campaigns: attributed profit (revenue − costs − returns). For equipment: labor, energy, efficiency savings. For expansion: incremental net profit.
Measurement horizon
Months over which you measure return. ROI at 12 months and at 36 months can tell very different stories. Set the horizon before calculating so comparisons across projects stay consistent.
Recurring cost (optional)
Monthly maintenance, license renewals, operating cost. If the project requires costs after the initial investment, declare them so ROI doesn't get inflated.
Formula
ROI = (Net profit − Initial investment) / Initial investment × 100. Payback period = Initial investment / Average monthly profit. If you invested $180,000 and generate $228,000 cumulative profit over 24 months, ROI at 24 months is 26.7% and approximate payback is 19 months.
How to interpret the result
A positive ROI is necessary but not sufficient: compare against your business cost of capital (the rate you'd pay for alternative money) and against alternatives with similar risk. An 8% ROI over 24 months can be good or bad depending on what else you could have done with that capital. Short payback reduces risk: the sooner you recover capital, the less vulnerable you are to market shifts.
How this calculator was reviewed
What you'll see, what it prevents, and where you shouldn't trust it
Every flagship calculator ships with the same editorial structure: two hypothetical worked examples with numbers, the errors it helps you avoid, the model's declared limitations, and a visible financial disclaimer. The review is signed and dated.
Hypothetical case·Case A
An SMB that evaluates a $180,000 machine and finds the 24-month ROI depends on shifts
A manufacturing SMB evaluates a $180,000 MXN machine that saves $9,500/month in labor and energy on one shift. 24-month ROI: 27% (cumulative gains $228,000 vs $180,000 cost). Running two shifts, monthly savings rise to $17,200 and 24-month ROI to 129%. But the second shift requires an extra supervisor and bumps maintenance. Decision: the calculator solves the ROI math; operational viability needs demand projection and personnel availability.
Illustrative figures. This example does not represent a real company or a financial recommendation.
Hypothetical case·Case B
A marketing campaign with 4.2 ROAS that actually returns 1.6 ROI when full cost is included
A Google Ads campaign spent $40,000 MXN and generated $168,000 MXN in attributed revenue. Reported platform ROAS: 4.2. The calculator with full costs: product sold $58,000, logistics $14,000, returns 6% ($10,080), gateway fees $4,300. Attributed profit: $41,620. Real ROI: ($41,620 − $40,000) / $40,000 = 4.05%. The gap between 'looks profitable' and 'barely pays' depends on which costs you include.
Illustrative figures. This example does not represent a real company or a financial recommendation.
Common mistakes it helps you avoid
Things a team or decision-maker might assume that this calculator forces you to verify before closing the math.
Measuring ROI too soon. A long-cycle campaign (B2B, big-ticket products) needs 60-180 days of cohort to see real profit, not just immediate conversions.
Confusing ROAS with ROI. ROAS is revenue / media cost; ROI is profit / total cost. A 4.0 ROAS can be a negative ROI if product margin is low.
Ignoring indirect costs. If the campaign needs a dedicated creative, tracking tools, agency, or team time, those costs also enter the denominator.
Attributing 100% of revenue to the measured channel. A sale can touch 3-5 channels before closing; multi-touch vs last-click attribution yield very different ROIs.
Model limitations
What the calculator does not do, and where you need a professional or a specialized tool.
Does not model discount rate or time value of money. For multi-year investments (>3 years) NPV or IRR analysis is more accurate.
Assumes attributed revenue is real. Platforms report with last-click bias; incremental attribution requires controlled experiments.
Does not include optionality: an investment that opens future markets or produces valuable data may be worth more than the direct first-cycle ROI.
Does not replace capital analysis with your CFO. It is a pre-screening calculator; for Capex above a few thousand pesos consult formal finance.
When NOT to use this calculator
Do not use this calculator for personal investment decisions (stocks, real estate, funds) — simple ROI ignores risk, volatility, and horizon. For investment portfolios, open the corresponding simulator; for financial markets, consult a registered advisor. And don't use it for formal corporate ROI reports: those require auditable methodology agreed with your CFO or controller.
Financial, tax, accounting and legal notice
The result is an informative estimate based on the data you enter. It does not constitute financial, tax, accounting, or legal advice. For decisions that affect taxes, financing, or wealth, validate the numbers with a certified professional in your jurisdiction.
Editorial review
Reviewed by the Simúlalo editorial team
This simulator was reviewed by the people listed below before being published. The review covers the declared formula, the model's assumptions, the explicit limitations, and the absence of unsupported financial claims.
They are part of the Simúlalo editorial team, focused on building financial tools that are clear, educational, and easy to interpret.
Last updated: ·We update this page when the methodology, sources used, or simulator structure change.
This tool uses standard financial formulas and user-supplied data. To explain concepts like rates, credit, risk, or cash flow we consult public and official sources (Banxico, SAT, CONDUSEF, CNBV, Banco de España, IFRS, BIS, among others). Simúlalo is not affiliated with, sponsored by, or endorsed by these institutions.
Frequently asked questions — ROI
1What's the difference between ROI, ROAS, and IRR?
ROI is profit / investment: uses net profit. ROAS is revenue / media cost: uses revenue, not profit — useful in marketing but misleading because it ignores margin and costs. IRR (Internal Rate of Return) discounts flows over time and lets you compare projects with different payment schedules. Simple ROI is for pre-screening; IRR is for formal financial analysis.
2How long until a reliable ROI?
Depends on the sales cycle. For a B2C consumer-product campaign, 30-60 days may suffice. For B2B with long cycles or expensive products (tickets >$5,000), between 60 and 180 days. For industrial equipment or expansion, at least 12-36 months with monthly cohorts to detect seasonality.
3How do I handle costs shared across multiple investments?
Allocate them proportionally. If a 3-person team works partially on a campaign, divide the cost of dedicated hours. Aggressive allocations (charging everything to the project) inflate the numbers; permissive allocations (charging nothing) hide them. Document the allocation criterion so ROI is defensible.
4Is marketing ROI the same as investment ROI?
Mechanically yes, but the components change. Campaign ROI: attributed profit / channel + production cost. Equipment investment ROI: incremental savings or revenue / Capex. Attribution accuracy is the real challenge in marketing; in equipment the challenge is projecting savings or revenue correctly.
5Is a high ROI always better?
Not necessarily. A 200% ROI on $5,000 is $10,000; a 30% ROI on $500,000 is $150,000. Total investment and scalability matter. Also, a very high short-term ROI may hide follow-on investments that later drain cash flow — verify in the cash flow simulator.
Compare what you invest with what comes back in the period, and see if it beats just leaving the money alone.
Results
Total ROI
50.0%
Monthly ROI
3.4%
Annualized ROI
50.0%
Net gain
MXN 5,000
Months to recover investment
8
Annualized ROI:50.0%12 mo
Annualized comparison
Your ROI:50.0%3-month Treasury (US):4.3%(+45.7pp)Inflation (US):2.8%(+47.2pp)
Healthy
Is the investment worth it, or should I wait?
Total ROI50.0%Payback8.0 m
Diagnosis
ROI 50.0% (annualized 50.0%), payback 8.0 months. Clear decision: the project recovers capital fast and multiplies with healthy margin.
Threshold
Clear decision: payback < 12 months AND ROI > 30%. Marginal: payback 12-24 months AND ROI 10-30%. Don't invest: payback > 24 months OR ROI < 10%.
Action
Go ahead, but with a cap: maximum spend $11,000 (110% of planned). Define a monthly control metric (new customer, % progress, pilot revenue) — if at month 3 you're not on plan, you stop.
Risk if you do nothing
The plan says it returns, but the risk is execution: scope creep, delays, hidden costs. Without a monthly control metric, you find out about the problem when it's already a problem.