{"id":90455,"date":"2025-01-09T16:09:12","date_gmt":"2025-01-09T21:09:12","guid":{"rendered":"https:\/\/monday.com\/blog\/?p=90455"},"modified":"2026-08-02T23:04:51","modified_gmt":"2026-08-03T04:04:51","slug":"roi-formula-excel","status":"publish","type":"post","link":"https:\/\/monday.com\/blog\/task-management\/roi-formula-excel\/","title":{"rendered":"How to calculate ROI in Excel (with formulas and examples)"},"content":{"rendered":"<div class=\"text-block\" id=\"text-block-1\">\n<p data-pm-slice=\"1 1 []\">Every business tracks investments, but few measure which ones actually pay off. Finance teams juggle marketing spend, software subscriptions, hiring costs, and capital expenditures across dozens of spreadsheets. Without a reliable way to calculate returns, decisions default to gut instinct instead of data. That&#8217;s where the ROI formula in Excel becomes essential.<\/p>\n<p>This guide walks through the ROI formula, how to set it up in Excel step by step, the different ROI variations you can apply to specific scenarios, and the limitations to consider before relying on a single metric. Whether you&#8217;re evaluating a $2,000 ad campaign or a $200,000 equipment purchase, you&#8217;ll have the formulas and structure to measure it accurately. For a broader look at ROI, see our <a href=\"https:\/\/monday.com\/blog\/project-management\/roi-return-on-investment\/\" target=\"_blank\" rel=\"noopener\">comprehensive ROI guide<\/a>.<\/p>\n<p>For teams managing ROI across multiple projects or departments, platforms like <a href=\"https:\/\/monday.com\/\" target=\"_blank\" rel=\"noopener\">monday AI Workspace<\/a> can automate the tracking that spreadsheets require manual tracking.<\/p>\n<a class=\"cta-button blue-button\" aria-label=\"Get started with monday.com\" href=\"https:\/\/auth.monday.com\/users\/sign_up_new\" target=\"_blank\">Get started with monday.com<\/a>\n\n<\/div>\n<div class=\"text-block\" id=\"text-block-2\">\n<h2 class=\"h2 text-block__title\">Key takeaways<\/h2>\n<ul>\n<li><strong>The basic ROI formula is (Net Profit\/Cost of Investment) x 100:<\/strong>\u00a0it gives you a percentage that shows how much return you earned relative to what you spent<\/li>\n<li><strong>You can build a functional ROI calculator in Excel in five steps: <\/strong>from labeling columns to adding conditional formatting that color-codes profitable and unprofitable investments<\/li>\n<li><strong>Four ROI formula variations cover different scenarios:<\/strong> net income ROI, capital gain ROI, total return ROI, and annualized ROI; each answers a slightly different financial question<\/li>\n<li><strong>ROI has real limitations:<\/strong> it doesn\u2019t account for the time value of money, ignores risk, and provides a static snapshot that can become outdated fast<\/li>\n<li><strong>A connected platform replaces manual Excel ROI tracking<\/strong> with formula columns that auto-calculate, dashboards that display live metrics, and automations that update figures whenever project data changes<\/li>\n<\/ul>\n\n<\/div>\n<div class=\"text-block\" id=\"text-block-3\">\n<h2 class=\"h2 text-block__title\">What is return on investment (ROI)?<\/h2>\n<p>Return on investment is a performance metric that measures how much profit or loss an investment generates relative to its cost. It\u2019s expressed as a percentage, making it straightforward to compare across different projects, campaigns, or assets.<\/p>\n\n<p>ROI matters because it simplifies complex financial decisions into a single, comparable number. Whether you\u2019re evaluating a <a href=\"https:\/\/monday.com\/blog\/marketing\/marketing-roi\/\" target=\"_blank\" rel=\"noopener\">marketing campaign\u2019s return<\/a>, a new piece of equipment, or a software subscription, ROI tells you if the dollars you put in generated more dollars coming out. Teams use it to prioritize investments, justify budgets, and <a href=\"https:\/\/monday.com\/blog\/project-management\/communications-plan-template\/\" target=\"_blank\" rel=\"noopener\">communicate results<\/a> to stakeholders who need fast answers, not lengthy financial reports.<\/p>\n<p>The basic formula looks like this: ROI = (Net Profit \/ Cost of Investment) x 100. If you invested $10,000 and earned $12,500 back, your net profit is $2,500 and your ROI is 25%. Simple enough \u2014 but there\u2019s a catch. Standard ROI doesn\u2019t account for the time value of money, meaning a 25% return over 1 year looks identical to a 25% return over 5 years. We\u2019ll cover that limitation \u2014 and how to handle it \u2014 later in this article.<\/p>\n\n<\/div>\n<div class=\"text-block\" id=\"text-block-4\">\n<h2 class=\"h2 text-block__title\">The basic ROI formula and how it works<\/h2>\n<p>What is the simple equation for ROI? At its core, the ROI formula has two variables and one operation:<\/p>\n<p><strong>ROI = (Net Profit \/ Cost of Investment) x 100<\/strong><\/p>\n<p>Here\u2019s what each part means. Net profit is the difference between what you earned and what you spent. Cost of investment is the total amount you originally put in. Multiplying by 100 converts the decimal into a percentage so you can compare it across investments without reaching for a calculator.<\/p>\n<p>Let\u2019s walk through a quick example. Suppose your team spends $10,000 on a paid advertising campaign. At the end of the quarter, that campaign generated $12,500 in revenue directly attributed to those ads. Here\u2019s the math:<\/p>\n<ul>\n<li><strong>Net Profit:<\/strong> $12,500 &#8211; $10,000 = $2,500<\/li>\n<li><strong>ROI:<\/strong> ($2,500 \/ $10,000) x 100 = 25%<\/li>\n<\/ul>\n<p>A positive ROI \u2014 anything above 0% \u2014 means the investment returned more than it cost. A negative ROI means you lost money. The higher the percentage, the more profitable the investment relative to its cost. Keep in mind that this basic formula gives you a total return figure regardless of how long the investment took to pay off. For time-adjusted comparisons, you\u2019ll want the annualized ROI variation covered below.<\/p>\n\n<\/div>\n<div class=\"text-block\" id=\"text-block-5\">\n<img width=\"623\" height=\"159\" src=\"https:\/\/monday.com\/blog\/wp-content\/uploads\/2026\/07\/image5-12.png\" class=\"attachment-large size-large\" alt=\"\" loading=\"lazy\" decoding=\"async\" srcset=\"https:\/\/monday.com\/blog\/wp-content\/uploads\/2026\/07\/image5-12.png 623w, https:\/\/monday.com\/blog\/wp-content\/uploads\/2026\/07\/image5-12-300x77.png 300w\" sizes=\"auto, (max-width: 623px) 100vw, 623px\" \/>\n<\/div>\n<div class=\"text-block\" id=\"text-block-6\">\n<h2 class=\"h2 text-block__title\">4 common ROI formula variations in Excel<\/h2>\n<p>The basic ROI formula works for quick, one-off calculations. But different financial scenarios call for different approaches. Each of the four variations below answers a slightly different question, and each one translates neatly into an Excel formula with specific cell references. Which one is right for your situation? That depends on what you\u2019re measuring and how precise you need to be.<\/p>\n<h3>Net income ROI<\/h3>\n<p>This is the most common version and the closest to the basic formula. Net income ROI divides your net income (revenue minus all expenses) by the cost of investment.<\/p>\n<p><strong>Formula:<\/strong> ROI = Net Income \/ Cost of Investment<\/p>\n<p>In Excel, if your net income sits in cell B2 and your cost of investment is in B3, the formula is simply <strong>=B2\/B3<\/strong>. Format the result as a percentage. For example, if a product launch generated $45,000 in net income on a $30,000 investment, your ROI is 150% \u2014 meaning you earned $1.50 for every $1 spent.<\/p>\n<h3>Capital gain ROI<\/h3>\n<p>Capital gain ROI measures the profit from selling an asset relative to what you originally paid for it. It\u2019s most common in stock portfolios and real estate.<\/p>\n<p><strong>Formula:<\/strong> ROI = (Sale Price &#8211; Purchase Price) \/ Purchase Price<\/p>\n<p>In Excel: <strong>=(B2-B3)\/B3<\/strong> where B2 is the sale price and B3 is the purchase price. If you purchased a property for $200,000 and sold it for $260,000, your capital gain ROI is 30%.<\/p>\n<h3>Total return ROI<\/h3>\n<p>Total return is similar to capital gain but includes additional income generated by the investment \u2014 dividends, interest payments, or rental income on top of the price change.<\/p>\n<p><strong>Formula:<\/strong> ROI = (Ending Value &#8211; Starting Value) \/ Cost of Investment<\/p>\n<p>In Excel: <strong>=(B2-B3)\/B4<\/strong> where B2 is your ending value (including all income received), B3 is your starting value, and B4 is your original cost. Total return gives a fuller picture because it captures every dollar the investment produced, not just the sale price.<\/p>\n<h3>Annualized ROI<\/h3>\n<p>Here\u2019s where things get more interesting. Standard ROI ignores time, which makes it unreliable for comparing investments held over different periods. A 60% return over 2 years sounds impressive \u2014 but is it more impressive than a 40% return over 1 year? Annualized ROI answers that question by normalizing returns to a per-year basis.<\/p>\n<p><strong>Formula:<\/strong> Annualized ROI = (Ending Value \/ Starting Value) ^ (1 \/ Number of Years) &#8211; 1<\/p>\n<p>In Excel: <strong>=(B2\/B3)^(1\/B4)-1<\/strong> where B2 is your ending value, B3 is your starting value, and B4 is the number of years. Alternatively, you can use Excel\u2019s built-in RATE function for more complex scenarios involving periodic payments.<\/p>\n<p>For the example above: a $10,000 investment that grows to $16,000 over 2 years has a total ROI of 60%, but an annualized ROI of about 26.5%. Compare that to a $10,000 investment returning $14,000 in 1 year \u2014 a 40% annualized ROI that significantly outperforms the two-year option on a per-year basis.<\/p>\n\n<\/div>\n<div class=\"text-block\" id=\"text-block-7\">\n<img width=\"476\" height=\"202\" src=\"https:\/\/monday.com\/blog\/wp-content\/uploads\/2026\/07\/image1-19.png\" class=\"attachment-large size-large\" alt=\"\" loading=\"lazy\" decoding=\"async\" srcset=\"https:\/\/monday.com\/blog\/wp-content\/uploads\/2026\/07\/image1-19.png 476w, https:\/\/monday.com\/blog\/wp-content\/uploads\/2026\/07\/image1-19-300x127.png 300w\" sizes=\"auto, (max-width: 476px) 100vw, 476px\" \/>\n<\/div>\n<div class=\"text-block\" id=\"text-block-8\">\n<h2 class=\"h2 text-block__title\">How to build an ROI calculator in Excel (five steps)<\/h2>\n<p>Building a reusable ROI calculator in Excel takes about 10 minutes and saves hours of ad-hoc calculations down the road. Follow these 5 steps to create a spreadsheet you can use for any investment: marketing campaigns, capital expenditures, software purchases, or project evaluations. You can also <a href=\"https:\/\/monday.com\/blog\/wp-content\/uploads\/2022\/07\/ROI_Financial_Statement.xlsx\" target=\"_blank\" rel=\"noopener\">download our free Excel template<\/a> to get a head start.<\/p>\n<h3>Step 1: set up your spreadsheet columns<\/h3>\n<p>Open a new Excel workbook and create 4 column headers in row 1: <strong>Investment Name<\/strong> (column A), <strong>Cost of Investment<\/strong> (column B), <strong>Net Return<\/strong> (column C), and <strong>ROI<\/strong> (column D). Select the entire range and format it as an Excel Table (Ctrl+T) \u2014 this makes it easier to add new rows later without breaking your formulas.<\/p>\n<h3>Step 2: enter your investment data<\/h3>\n<p>Starting in row 2, enter each investment on its own row. Type the name in column A, the total cost in column B, and the net return (total revenue or ending value) in column C. Use consistent currency formatting across both financial columns: select columns B and C, right-click, choose \u201cFormat Cells,\u201d and select Currency with 2 decimal places.<\/p>\n<h3>Step 3: write the ROI formula<\/h3>\n<p>Click into cell D2 and type the formula: <strong>=(C2-B2)\/B2<\/strong>. This subtracts your cost from your return, then divides by the cost to give you ROI as a decimal. Select Enter. If you formatted your data as a Table in Step 1, Excel will automatically fill the formula down for every row you add.<\/p>\n<h3>Step 4: format the result as a percentage<\/h3>\n<p>Select column D, right-click, and choose \u201cFormat Cells.\u201d Under the Number tab, select Percentage and set decimal places to 1 or 2, whatever precision your stakeholders prefer. Your ROI values will now display as readable percentages instead of raw decimals.<\/p>\n<h3>Step 5: add conditional formatting for quick analysis<\/h3>\n<p>Highlight the ROI column, go to Home &gt; Conditional Formatting, and create two rules. First: format cells greater than 0 with a green fill and dark green text. Second: format cells less than 0 with a red fill and dark red text. Now every positive ROI glows green, and every loss stands out in red, making it easy to scan dozens of investments at a glance. You can also add Data Bars or Icon Sets for a more visual comparison across rows.<\/p>\n<a class=\"cta-button blue-button\" aria-label=\"Get started with monday.com\" href=\"https:\/\/auth.monday.com\/users\/sign_up_new\" target=\"_blank\">Get started with monday.com<\/a>\n\n<\/div>\n<div class=\"text-block\" id=\"text-block-9\">\n<h2 class=\"h2 text-block__title\">What ROI does and doesn\u2019t measure<\/h2>\n<p>ROI is powerful precisely because it\u2019s simple. But that simplicity comes with trade-offs. Understanding where the formula needs support helps you make more accurate decisions \u2014 and know when to bring in additional metrics. Does ROI account for the time value of money? No, and that\u2019s just one of several gaps worth knowing about.<\/p>\n<p>Here are the key limitations to consider before relying on ROI as your only measure:<\/p>\n<ul>\n<li><strong>Does not account for the time value of money:<\/strong> A 50% return over 1 year is far more valuable than a 50% return over 10 years. The basic ROI formula treats both identically. For time-adjusted analysis, use annualized ROI or net present value (NPV).<\/li>\n<li><strong>Ignores risk:<\/strong> Two investments can show identical ROI numbers while carrying vastly different risk profiles. A government bond and a startup investment might both return 15%, but the probability of achieving that return differs dramatically.<\/li>\n<li><strong>Can be manipulated by cost allocation:<\/strong> Different teams may define \u201ccost of investment\u201d differently. Include only direct costs, and your ROI looks stellar. Include overhead, labor, and opportunity costs, and the picture changes.<\/li>\n<li><strong>No standardized definition across organizations:<\/strong> Marketing teams, finance teams, and operations teams often calculate ROI using slightly different inputs \u2014 which makes cross-departmental comparisons unreliable without agreed-upon definitions.<\/li>\n<li><strong>Provides a static snapshot:<\/strong> A single ROI calculation captures one moment in time. It won\u2019t tell you if returns are trending up or down, or if a project that looked profitable last quarter is now underperforming.<\/li>\n<\/ul>\n<p>What if your ROI calculations could update automatically as new data comes in? That\u2019s exactly the shift from static spreadsheets to live, connected platforms \u2014 and we\u2019ll cover how that works shortly.<\/p>\n\n<\/div>\n<div class=\"text-block\" id=\"text-block-10\">\n<h2 class=\"h2 text-block__title\">What is a good ROI percentage?<\/h2>\n<p>\u201cGood\u201d ROI isn\u2019t a fixed number \u2014 it depends entirely on context. The industry you\u2019re in, the risk you\u2019re taking, the time horizon of the investment, and the opportunity cost of putting that money elsewhere all shape what counts as a worthwhile return.\u00a0A 10% annual return might be outstanding for a low-risk bond portfolio but underwhelming for a high-growth marketing campaign.<\/p>\n<p>Here are some general benchmarks to use as reference points:<\/p>\n<ul>\n<li><strong>Stock market:<\/strong> ~7-10% annually after inflation is the long-term historical average for diversified portfolios.<\/li>\n<li><strong>Real estate:<\/strong> 8-12% annual return is generally considered strong, though it varies by market and property type.<\/li>\n<li><strong>Marketing campaigns:<\/strong> A 5:1 return ratio (500% ROI) is a common benchmark, meaning $5 earned for every $1 spent.<\/li>\n<li><strong>Business projects:<\/strong> Any positive ROI may be worthwhile if it exceeds the company\u2019s cost of capital \u2014 the minimum return needed to justify the investment.<\/li>\n<\/ul>\n<p>How do you calculate a 10% ROI? Rearrange the formula: if you need a 10% return on a $50,000 investment, you need $5,000 in net profit. The required return equals (Target ROI% \/ 100) x Cost of Investment. This works for setting performance targets \u2014 you can calculate exactly how much revenue a campaign or project needs to generate to hit your threshold.<\/p>\n<p>When comparing ROI across investments with different holding periods, always annualize the returns first. A 30% total return over 3 years is roughly 9.1% annualized \u2014 which you can then compare directly against a 12% annual return on a 1-year investment.<\/p>\n\n<\/div>\n<div class=\"text-block\" id=\"text-block-11\">\n<h2 class=\"h2 text-block__title\">Make your Excel ROI calculator dynamic<\/h2>\n<p>A basic ROI spreadsheet gets the job done for one-off calculations, but it becomes more powerful when you add interactive features. These enhancements turn a static table into a flexible analysis dashboard \u2014 all within Excel.<\/p>\n<p>Here are 4 features that add real analytical depth:<\/p>\n<ul>\n<li><strong>IF formulas for instant labels:<\/strong> Add a column with <strong>=IF(D2&gt;=0.1,&#8221;Meets Target&#8221;,&#8221;Below Target&#8221;)<\/strong> to instantly flag which investments hit your ROI threshold. Change the 0.1 to whatever target percentage your team has set.<\/li>\n<li><strong>Dropdown menus for categorization:<\/strong> Use Data Validation to create a dropdown in a \u201cCategory\u201d column (marketing, operations, capital expenditure). This lets you filter and compare ROI by investment type without building separate spreadsheets.<\/li>\n<li><strong>SUM and AVERAGE for portfolio-level metrics:<\/strong> Add summary rows using <strong>=AVERAGE(D2:D20)<\/strong> for your portfolio\u2019s average ROI and <strong>=SUM(C2:C20)-SUM(B2:B20)<\/strong> for total net profit across all investments.<\/li>\n<li><strong>Charts for visual comparison:<\/strong> Select your Investment Name and ROI columns, insert a bar chart, and you\u2019ve got a visual ranking of your strongest and weakest investments. Add a reference line at your target ROI to see which investments clear the bar.<\/li>\n<\/ul>\n<p>These Excel enhancements help \u2014 but they still require manual updates every time your data changes. Every new expense entry, revenue adjustment, or project milestone means opening the spreadsheet, updating cells, and re-checking formulas. For teams tracking ROI across more than a handful of projects, that manual loop becomes the bottleneck.<\/p>\n\n<\/div>\n<div class=\"text-block\" id=\"text-block-12\">\n<h2 class=\"h2 text-block__title\">How monday AI Workspace replaces manual ROI tracking<\/h2>\n<p>Excel works for one-time ROI calculations. Tracking return on investment across multiple projects, departments, or quarters reveals the limits of a static spreadsheet. Version control issues, broken formulas, and the constant need to re-enter data are the real costs of manual tracking. Anyone doing <a href=\"https:\/\/monday.com\/blog\/project-management\/project-cost-tracking\/\" target=\"_blank\" rel=\"noopener\">project cost tracking<\/a> manually knows these friction points don\u2019t show up in any ROI formula.<\/p>\n<p>monday AI Workspace eliminates those friction points by connecting your financial data to live, auto-updating calculations. Here\u2019s how the platform replaces each piece of the Excel workflow:<\/p>\n<ul>\n<li><strong>Formula columns and<\/strong> <a href=\"https:\/\/monday.com\/features\/dashboards\" target=\"_blank\" rel=\"noopener\"><strong>dashboards<\/strong><\/a><strong>:<\/strong> Replace manual Excel formulas with <a href=\"https:\/\/support.monday.com\/hc\/en-us\/articles\/360003340799-The-Formula-Column\" target=\"_blank\" rel=\"noopener\">formula columns<\/a> that auto-calculate ROI, net profit, and return ratios across every row. Portfolio-level dashboards display live metrics for stakeholders \u2014 no one needs to request an updated spreadsheet<\/li>\n<li><a href=\"https:\/\/monday.com\/features\/automations\" target=\"_blank\" rel=\"noopener\"><strong>Automations<\/strong><\/a><strong>:<\/strong> When project costs or revenue figures change, ROI recalculates instantly. Set up automations to notify your team when an investment drops below a target threshold or when a project hits a milestone that impacts its return<\/li>\n<li><strong>monday vibe:<\/strong> Need a custom ROI calculator app? Describe what you want in plain language and monday vibe builds it for you \u2014 no coding, no complex spreadsheet macros. You get a tailored financial tracking interface in minutes<\/li>\n<li><strong>monday agents:<\/strong> AI agents generate financial reports on schedule, surface at-risk investments so teams can act early, and track metrics progress against goals automatically. Instead of pulling numbers into a quarterly deck, the data is already waiting for you<\/li>\n<li><strong>Excel import and integrations:<\/strong> Already have years of ROI data in spreadsheets? Import existing Excel files directly into the platform. Integrations with Salesforce, HubSpot, and other revenue sources mean your data flows in automatically<\/li>\n<\/ul>\n<p>The results speak for themselves. Customers report an average 8x ROI from using the platform, with $250,000 saved annually to reinvest elsewhere. An independent <a href=\"https:\/\/monday.com\/p\/forrester-tei\/\" target=\"_blank\" rel=\"noopener\">Forrester Total Economic Impact study<\/a> found a payback period of less than 4 months. Whether you\u2019re tracking campaign performance with an <a href=\"https:\/\/monday.com\/templates\/expense-tracking\" target=\"_blank\" rel=\"noopener\">expense tracking template<\/a> or monitoring departmental budgets with a <a href=\"https:\/\/monday.com\/templates\/budget-tracker\" target=\"_blank\" rel=\"noopener\">budget tracker template<\/a>, the platform keeps every number current without the manual overhead.<\/p>\n\n<\/div>\n<div class=\"text-block\" id=\"text-block-13\">\n<img width=\"1024\" height=\"670\" src=\"https:\/\/monday.com\/blog\/wp-content\/uploads\/2026\/07\/Dashboard-1202-4-1024x670-1.jpg\" class=\"attachment-large size-large\" alt=\"\" loading=\"lazy\" decoding=\"async\" srcset=\"https:\/\/monday.com\/blog\/wp-content\/uploads\/2026\/07\/Dashboard-1202-4-1024x670-1.jpg 1024w, https:\/\/monday.com\/blog\/wp-content\/uploads\/2026\/07\/Dashboard-1202-4-1024x670-1-300x196.jpg 300w, https:\/\/monday.com\/blog\/wp-content\/uploads\/2026\/07\/Dashboard-1202-4-1024x670-1-768x503.jpg 768w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/>\n<\/div>\n<div class=\"text-block\" id=\"text-block-14\">\n<a class=\"cta-button blue-button\" aria-label=\"Get started with monday.com\" href=\"https:\/\/auth.monday.com\/users\/sign_up_new\" target=\"_blank\">Get started with monday.com<\/a>\n\n<\/div>\n<div class=\"text-block\" id=\"text-block-15\">\n<h2 class=\"h2 text-block__title\">Track every dollar and measure what matters<\/h2>\n<p>ROI is one of the most essential metrics in business \u2014 and now you have the formulas, variations, and step-by-step instructions to calculate it confidently in Excel. From basic net profit calculations to annualized returns and dynamic spreadsheet features, you\u2019re equipped to evaluate any investment and present the numbers that drive decisions.<\/p>\n<p>That\u00a0said, Excel has a ceiling. When your team is tracking ROI across dozens of projects, campaigns, and departments, a connected platform keeps everything accurate and accessible in real time. monday AI Workspace brings your ROI formula, financial data, and stakeholder reporting into one workspace \u2014 with live dashboards, automated recalculations, and AI-powered insights that replace the manual spreadsheet cycle entirely.<\/p>\n<a class=\"cta-button blue-button\" aria-label=\"Get started with monday.com\" href=\"https:\/\/auth.monday.com\/users\/sign_up_new\" target=\"_blank\">Get started with monday.com<\/a>\n\n<\/div>\n<div class=\"text-block\" id=\"text-block-16\">\n<div class=\"accordion faq\" id=\"faq-faqs\">\n  <h2 class=\"accordion__heading section-title text-left\">FAQs<\/h2>\n    <div class=\"accordion__item\">\n    <a class=\"accordion__button d-block\" data-toggle=\"collapse\" data-parent=\"#faq-faqs\" href=\"#q-faqs-1\" aria-expanded=\"false\">\n      <h3 class=\"accordion__question\">What is the formula for calculating ROI?        \n          \n        \n      <\/h3>\n    <\/a>\n    <div id=\"q-faqs-1\" class=\"accordion__answer collapse collapse--md\" data-parent=\"#faq-faqs\">\n      <p>The formula for calculating ROI is (Net Profit \/ Cost of Investment) x 100. This gives you a percentage that shows how much return you earned relative to what you spent.<\/p>\n    <\/div>\n  <\/div>\n    <div class=\"accordion__item\">\n    <a class=\"accordion__button d-block\" data-toggle=\"collapse\" data-parent=\"#faq-faqs\" href=\"#q-faqs-2\" aria-expanded=\"false\">\n      <h3 class=\"accordion__question\">What is a good ROI percentage?        \n          \n        \n      <\/h3>\n    <\/a>\n    <div id=\"q-faqs-2\" class=\"accordion__answer collapse collapse--md\" data-parent=\"#faq-faqs\">\n      <p>A good ROI percentage depends on the investment type and industry. For stock market investments, 7-10% annually is a common benchmark, while marketing campaigns often target a 5:1 return ratio (500% ROI).<\/p>\n    <\/div>\n  <\/div>\n    <div class=\"accordion__item\">\n    <a class=\"accordion__button d-block\" data-toggle=\"collapse\" data-parent=\"#faq-faqs\" href=\"#q-faqs-3\" aria-expanded=\"false\">\n      <h3 class=\"accordion__question\">How do you calculate a 10% ROI?        \n          \n        \n      <\/h3>\n    <\/a>\n    <div id=\"q-faqs-3\" class=\"accordion__answer collapse collapse--md\" data-parent=\"#faq-faqs\">\n      <p>To calculate a 10% ROI, you need a net profit that equals 10% of your total investment cost. For a $50,000 investment, that means earning $5,000 in net profit \u2014 so your total return would need to reach $55,000.<\/p>\n    <\/div>\n  <\/div>\n    <div class=\"accordion__item\">\n    <a class=\"accordion__button d-block\" data-toggle=\"collapse\" data-parent=\"#faq-faqs\" href=\"#q-faqs-4\" aria-expanded=\"false\">\n      <h3 class=\"accordion__question\">What is the difference between ROI and annualized ROI?        \n          \n        \n      <\/h3>\n    <\/a>\n    <div id=\"q-faqs-4\" class=\"accordion__answer collapse collapse--md\" data-parent=\"#faq-faqs\">\n      <p>Standard ROI measures total return regardless of time period, while annualized ROI adjusts the return to reflect a per-year rate. Annualized ROI is more useful when comparing investments held for different durations because it normalizes the time factor.<\/p>\n    <\/div>\n  <\/div>\n    <div class=\"accordion__item\">\n    <a class=\"accordion__button d-block\" data-toggle=\"collapse\" data-parent=\"#faq-faqs\" href=\"#q-faqs-5\" aria-expanded=\"false\">\n      <h3 class=\"accordion__question\">Does ROI account for the time value of money?        \n          \n        \n      <\/h3>\n    <\/a>\n    <div id=\"q-faqs-5\" class=\"accordion__answer collapse collapse--md\" data-parent=\"#faq-faqs\">\n      <p>No, the basic ROI formula does not account for the time value of money. It treats every dollar the same regardless of when it was earned. For time-adjusted returns, use annualized ROI or net present value (NPV) instead.<\/p>\n    <\/div>\n  <\/div>\n    <div class=\"accordion__item\">\n    <a class=\"accordion__button d-block\" data-toggle=\"collapse\" data-parent=\"#faq-faqs\" href=\"#q-faqs-6\" aria-expanded=\"false\">\n      <h3 class=\"accordion__question\">What Excel functions are used for ROI calculations?        \n          \n        \n      <\/h3>\n    <\/a>\n    <div id=\"q-faqs-6\" class=\"accordion__answer collapse collapse--md\" data-parent=\"#faq-faqs\">\n      <p>The most common Excel functions for ROI calculations are basic arithmetic division (=B2\/B3), SUM for totaling costs and returns, and the RATE function for annualized return calculations. You can also use IF functions to flag investments that meet a target ROI threshold.<\/p>\n    <\/div>\n  <\/div>\n    <div class=\"accordion__item\">\n    <a class=\"accordion__button d-block\" data-toggle=\"collapse\" data-parent=\"#faq-faqs\" href=\"#q-faqs-7\" aria-expanded=\"false\">\n      <h3 class=\"accordion__question\">Can monday AI Workspace replace Excel for ROI tracking?        \n          \n        \n      <\/h3>\n    <\/a>\n    <div id=\"q-faqs-7\" class=\"accordion__answer collapse collapse--md\" data-parent=\"#faq-faqs\">\n      <p>Yes, the platform replaces manual Excel ROI tracking with formula columns that auto-calculate, dashboards that display live metrics, and automations that update figures whenever project data changes. Teams report an average 8x ROI from using monday AI Workspace.<\/p>\n    <\/div>\n  <\/div>\n  {\n    \"@context\": \"https:\\\/\\\/schema.org\",\n    \"@type\": \"FAQPage\",\n    \"mainEntity\": [\n        {\n            \"@type\": \"Question\",\n            \"name\": \"What is the formula for calculating ROI?\",\n            \"acceptedAnswer\": {\n                \"@type\": \"Answer\",\n                \"text\": \"<p>The formula for calculating ROI is (Net Profit \\\/ Cost of Investment) x 100. This gives you a percentage that shows how much return you earned relative to what you spent.\\n\"\n            }\n        },\n        {\n            \"@type\": \"Question\",\n            \"name\": \"What is a good ROI percentage?\",\n            \"acceptedAnswer\": {\n                \"@type\": \"Answer\",\n                \"text\": \"<p>A good ROI percentage depends on the investment type and industry. For stock market investments, 7-10% annually is a common benchmark, while marketing campaigns often target a 5:1 return ratio (500% ROI).\\n\"\n            }\n        },\n        {\n            \"@type\": \"Question\",\n            \"name\": \"How do you calculate a 10% ROI?\",\n            \"acceptedAnswer\": {\n                \"@type\": \"Answer\",\n                \"text\": \"<p>To calculate a 10% ROI, you need a net profit that equals 10% of your total investment cost. For a $50,000 investment, that means earning $5,000 in net profit \\u2014 so your total return would need to reach $55,000.\\n\"\n            }\n        },\n        {\n            \"@type\": \"Question\",\n            \"name\": \"What is the difference between ROI and annualized ROI?\",\n            \"acceptedAnswer\": {\n                \"@type\": \"Answer\",\n                \"text\": \"<p>Standard ROI measures total return regardless of time period, while annualized ROI adjusts the return to reflect a per-year rate. Annualized ROI is more useful when comparing investments held for different durations because it normalizes the time factor.\\n\"\n            }\n        },\n        {\n            \"@type\": \"Question\",\n            \"name\": \"Does ROI account for the time value of money?\",\n            \"acceptedAnswer\": {\n                \"@type\": \"Answer\",\n                \"text\": \"<p>No, the basic ROI formula does not account for the time value of money. It treats every dollar the same regardless of when it was earned. For time-adjusted returns, use annualized ROI or net present value (NPV) instead.\\n\"\n            }\n        },\n        {\n            \"@type\": \"Question\",\n            \"name\": \"What Excel functions are used for ROI calculations?\",\n            \"acceptedAnswer\": {\n                \"@type\": \"Answer\",\n                \"text\": \"<p>The most common Excel functions for ROI calculations are basic arithmetic division (=B2\\\/B3), SUM for totaling costs and returns, and the RATE function for annualized return calculations. You can also use IF functions to flag investments that meet a target ROI threshold.\\n\"\n            }\n        },\n        {\n            \"@type\": \"Question\",\n            \"name\": \"Can monday AI Workspace replace Excel for ROI tracking?\",\n            \"acceptedAnswer\": {\n                \"@type\": \"Answer\",\n                \"text\": \"<p>Yes, the platform replaces manual Excel ROI tracking with formula columns that auto-calculate, dashboards that display live metrics, and automations that update figures whenever project data changes. Teams report an average 8x ROI from using monday AI Workspace.\\n\"\n            }\n        }\n    ]\n}<\/div>\n\n\n<\/div>","protected":false},"excerpt":{"rendered":"<p>Staying on top of your company\u2019s finances is absolutely critical. Regardless of industry or what sort of goods or services you\u2019re selling, you need to know how much money is going into and out of the business because that\u2019s going to tell you how worthwhile everything you\u2019re doing is. This &#8230;<\/p>\n","protected":false},"author":310,"featured_media":221512,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"pages\/cornerstone-primary.php","format":"standard","meta":{"_acf_changed":false,"monday_item_id":18040632430,"monday_board_id":0,"footnotes":"","_links_to":"","_links_to_target":""},"categories":[13996,13916],"tags":[],"class_list":["post-90455","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-administration","category-task-management"],"acf":{"lobby_image":false,"post_thumbnail_title":"","hide_post_info":false,"hide_bottom_cta":false,"hide_from_blog":false,"cluster":"","display_dates":"updated","banner_url":"http:\/\/auth.monday.com\/solutions\/add_solution?solution_id=10049447","main_text_banner":"Get the ROI formula excel","sub_title_banner":"Join the 152K+ customers that use monday.com","sub_title_banner_second":"","banner_button_text":"","below_banner_line":"","use_customized_cta":false,"display_subscribe_widget":false,"custom_schema_code":"","landing_page_layout":false,"featured_image_link":"","sidebar_color_banner":"","custom_tags":false,"faqs":[{"faq_title":"FAQs","faq_shortcode":"faqs","faq":[{"question":"What is the formula for calculating ROI?","answer":"<p>The formula for calculating ROI is (Net Profit \/ Cost of Investment) x 100. This gives you a percentage that shows how much return you earned relative to what you spent.<\/p>\n"},{"question":"What is a good ROI percentage?","answer":"<p>A good ROI percentage depends on the investment type and industry. For stock market investments, 7-10% annually is a common benchmark, while marketing campaigns often target a 5:1 return ratio (500% ROI).<\/p>\n"},{"question":"How do you calculate a 10% ROI?","answer":"<p>To calculate a 10% ROI, you need a net profit that equals 10% of your total investment cost. For a $50,000 investment, that means earning $5,000 in net profit \u2014 so your total return would need to reach $55,000.<\/p>\n"},{"question":"What is the difference between ROI and annualized ROI?","answer":"<p>Standard ROI measures total return regardless of time period, while annualized ROI adjusts the return to reflect a per-year rate. Annualized ROI is more useful when comparing investments held for different durations because it normalizes the time factor.<\/p>\n"},{"question":"Does ROI account for the time value of money?","answer":"<p>No, the basic ROI formula does not account for the time value of money. It treats every dollar the same regardless of when it was earned. For time-adjusted returns, use annualized ROI or net present value (NPV) instead.<\/p>\n"},{"question":"What Excel functions are used for ROI calculations?","answer":"<p>The most common Excel functions for ROI calculations are basic arithmetic division (=B2\/B3), SUM for totaling costs and returns, and the RATE function for annualized return calculations. You can also use IF functions to flag investments that meet a target ROI threshold.<\/p>\n"},{"question":"Can monday AI Workspace replace Excel for ROI tracking?","answer":"<p>Yes, the platform replaces manual Excel ROI tracking with formula columns that auto-calculate, dashboards that display live metrics, and automations that update figures whenever project data changes. Teams report an average 8x ROI from using monday AI Workspace.<\/p>\n"}]}],"activate_cta_banner":false,"hide_time_to_read":false,"cornerstone_hero_cta_override":{"label":"","url":""},"menu_cta_override":{"label":"","url":""},"show_contact_sales_button":"default","override_contact_sales_label":"","override_contact_sales_url":"","custom_header_banner":false,"parse_from_google_doc":false,"sections":[{"acf_fc_layout":"content_1","blocks":[{"main_heading":"","content_block":[{"acf_fc_layout":"text","content":"<p data-pm-slice=\"1 1 []\">Every business tracks investments, but few measure which ones actually pay off. Finance teams juggle marketing spend, software subscriptions, hiring costs, and capital expenditures across dozens of spreadsheets. Without a reliable way to calculate returns, decisions default to gut instinct instead of data. That&#8217;s where the ROI formula in Excel becomes essential.<\/p>\n<p>This guide walks through the ROI formula, how to set it up in Excel step by step, the different ROI variations you can apply to specific scenarios, and the limitations to consider before relying on a single metric. Whether you&#8217;re evaluating a $2,000 ad campaign or a $200,000 equipment purchase, you&#8217;ll have the formulas and structure to measure it accurately. For a broader look at ROI, see our <a href=\"https:\/\/monday.com\/blog\/project-management\/roi-return-on-investment\/\" target=\"_blank\" rel=\"noopener\">comprehensive ROI guide<\/a>.<\/p>\n<p>For teams managing ROI across multiple projects or departments, platforms like <a href=\"https:\/\/monday.com\/\" target=\"_blank\" rel=\"noopener\">monday AI Workspace<\/a> can automate the tracking that spreadsheets require manual tracking.<\/p>\n<a class=\"cta-button blue-button\" aria-label=\"Get started with monday.com\" href=\"https:\/\/auth.monday.com\/users\/sign_up_new\" target=\"_blank\">Get started with monday.com<\/a>\n"}]},{"main_heading":"Key takeaways","content_block":[{"acf_fc_layout":"text","content":"<ul>\n<li><strong>The basic ROI formula is (Net Profit\/Cost of Investment) x 100:<\/strong>\u00a0it gives you a percentage that shows how much return you earned relative to what you spent<\/li>\n<li><strong>You can build a functional ROI calculator in Excel in five steps: <\/strong>from labeling columns to adding conditional formatting that color-codes profitable and unprofitable investments<\/li>\n<li><strong>Four ROI formula variations cover different scenarios:<\/strong> net income ROI, capital gain ROI, total return ROI, and annualized ROI; each answers a slightly different financial question<\/li>\n<li><strong>ROI has real limitations:<\/strong> it doesn\u2019t account for the time value of money, ignores risk, and provides a static snapshot that can become outdated fast<\/li>\n<li><strong>A connected platform replaces manual Excel ROI tracking<\/strong> with formula columns that auto-calculate, dashboards that display live metrics, and automations that update figures whenever project data changes<\/li>\n<\/ul>\n"}]},{"main_heading":"What is return on investment (ROI)?","content_block":[{"acf_fc_layout":"text","content":"<p>Return on investment is a performance metric that measures how much profit or loss an investment generates relative to its cost. It\u2019s expressed as a percentage, making it straightforward to compare across different projects, campaigns, or assets.<\/p>\n"},{"acf_fc_layout":"colored_notification","text":"<p>ROI is a direct measure of return showing how much money you\u2019ve made on a particular investment in relation to the cost of that investment.<\/p>\n","quote":false,"author":"","position":"","avatar":false},{"acf_fc_layout":"text","content":"<p>ROI matters because it simplifies complex financial decisions into a single, comparable number. Whether you\u2019re evaluating a <a href=\"https:\/\/monday.com\/blog\/marketing\/marketing-roi\/\" target=\"_blank\" rel=\"noopener\">marketing campaign\u2019s return<\/a>, a new piece of equipment, or a software subscription, ROI tells you if the dollars you put in generated more dollars coming out. Teams use it to prioritize investments, justify budgets, and <a href=\"https:\/\/monday.com\/blog\/project-management\/communications-plan-template\/\" target=\"_blank\" rel=\"noopener\">communicate results<\/a> to stakeholders who need fast answers, not lengthy financial reports.<\/p>\n<p>The basic formula looks like this: ROI = (Net Profit \/ Cost of Investment) x 100. If you invested $10,000 and earned $12,500 back, your net profit is $2,500 and your ROI is 25%. Simple enough \u2014 but there\u2019s a catch. Standard ROI doesn\u2019t account for the time value of money, meaning a 25% return over 1 year looks identical to a 25% return over 5 years. We\u2019ll cover that limitation \u2014 and how to handle it \u2014 later in this article.<\/p>\n"}]},{"main_heading":"The basic ROI formula and how it works","content_block":[{"acf_fc_layout":"text","content":"<p>What is the simple equation for ROI? At its core, the ROI formula has two variables and one operation:<\/p>\n<p><strong>ROI = (Net Profit \/ Cost of Investment) x 100<\/strong><\/p>\n<p>Here\u2019s what each part means. Net profit is the difference between what you earned and what you spent. Cost of investment is the total amount you originally put in. Multiplying by 100 converts the decimal into a percentage so you can compare it across investments without reaching for a calculator.<\/p>\n<p>Let\u2019s walk through a quick example. Suppose your team spends $10,000 on a paid advertising campaign. At the end of the quarter, that campaign generated $12,500 in revenue directly attributed to those ads. Here\u2019s the math:<\/p>\n<ul>\n<li><strong>Net Profit:<\/strong> $12,500 &#8211; $10,000 = $2,500<\/li>\n<li><strong>ROI:<\/strong> ($2,500 \/ $10,000) x 100 = 25%<\/li>\n<\/ul>\n<p>A positive ROI \u2014 anything above 0% \u2014 means the investment returned more than it cost. A negative ROI means you lost money. The higher the percentage, the more profitable the investment relative to its cost. Keep in mind that this basic formula gives you a total return figure regardless of how long the investment took to pay off. For time-adjusted comparisons, you\u2019ll want the annualized ROI variation covered below.<\/p>\n"}]},{"main_heading":"","content_block":[{"acf_fc_layout":"image","image_type":"normal","image":355039,"image_link":""}]},{"main_heading":"4 common ROI formula variations in Excel","content_block":[{"acf_fc_layout":"text","content":"<p>The basic ROI formula works for quick, one-off calculations. But different financial scenarios call for different approaches. Each of the four variations below answers a slightly different question, and each one translates neatly into an Excel formula with specific cell references. Which one is right for your situation? That depends on what you\u2019re measuring and how precise you need to be.<\/p>\n<h3>Net income ROI<\/h3>\n<p>This is the most common version and the closest to the basic formula. Net income ROI divides your net income (revenue minus all expenses) by the cost of investment.<\/p>\n<p><strong>Formula:<\/strong> ROI = Net Income \/ Cost of Investment<\/p>\n<p>In Excel, if your net income sits in cell B2 and your cost of investment is in B3, the formula is simply <strong>=B2\/B3<\/strong>. Format the result as a percentage. For example, if a product launch generated $45,000 in net income on a $30,000 investment, your ROI is 150% \u2014 meaning you earned $1.50 for every $1 spent.<\/p>\n<h3>Capital gain ROI<\/h3>\n<p>Capital gain ROI measures the profit from selling an asset relative to what you originally paid for it. It\u2019s most common in stock portfolios and real estate.<\/p>\n<p><strong>Formula:<\/strong> ROI = (Sale Price &#8211; Purchase Price) \/ Purchase Price<\/p>\n<p>In Excel: <strong>=(B2-B3)\/B3<\/strong> where B2 is the sale price and B3 is the purchase price. If you purchased a property for $200,000 and sold it for $260,000, your capital gain ROI is 30%.<\/p>\n<h3>Total return ROI<\/h3>\n<p>Total return is similar to capital gain but includes additional income generated by the investment \u2014 dividends, interest payments, or rental income on top of the price change.<\/p>\n<p><strong>Formula:<\/strong> ROI = (Ending Value &#8211; Starting Value) \/ Cost of Investment<\/p>\n<p>In Excel: <strong>=(B2-B3)\/B4<\/strong> where B2 is your ending value (including all income received), B3 is your starting value, and B4 is your original cost. Total return gives a fuller picture because it captures every dollar the investment produced, not just the sale price.<\/p>\n<h3>Annualized ROI<\/h3>\n<p>Here\u2019s where things get more interesting. Standard ROI ignores time, which makes it unreliable for comparing investments held over different periods. A 60% return over 2 years sounds impressive \u2014 but is it more impressive than a 40% return over 1 year? Annualized ROI answers that question by normalizing returns to a per-year basis.<\/p>\n<p><strong>Formula:<\/strong> Annualized ROI = (Ending Value \/ Starting Value) ^ (1 \/ Number of Years) &#8211; 1<\/p>\n<p>In Excel: <strong>=(B2\/B3)^(1\/B4)-1<\/strong> where B2 is your ending value, B3 is your starting value, and B4 is the number of years. Alternatively, you can use Excel\u2019s built-in RATE function for more complex scenarios involving periodic payments.<\/p>\n<p>For the example above: a $10,000 investment that grows to $16,000 over 2 years has a total ROI of 60%, but an annualized ROI of about 26.5%. Compare that to a $10,000 investment returning $14,000 in 1 year \u2014 a 40% annualized ROI that significantly outperforms the two-year option on a per-year basis.<\/p>\n"}]},{"main_heading":"","content_block":[{"acf_fc_layout":"image","image_type":"normal","image":355047,"image_link":""}]},{"main_heading":"How to build an ROI calculator in Excel (five steps)","content_block":[{"acf_fc_layout":"text","content":"<p>Building a reusable ROI calculator in Excel takes about 10 minutes and saves hours of ad-hoc calculations down the road. Follow these 5 steps to create a spreadsheet you can use for any investment: marketing campaigns, capital expenditures, software purchases, or project evaluations. You can also <a href=\"https:\/\/monday.com\/blog\/wp-content\/uploads\/2022\/07\/ROI_Financial_Statement.xlsx\" target=\"_blank\" rel=\"noopener\">download our free Excel template<\/a> to get a head start.<\/p>\n<h3>Step 1: set up your spreadsheet columns<\/h3>\n<p>Open a new Excel workbook and create 4 column headers in row 1: <strong>Investment Name<\/strong> (column A), <strong>Cost of Investment<\/strong> (column B), <strong>Net Return<\/strong> (column C), and <strong>ROI<\/strong> (column D). Select the entire range and format it as an Excel Table (Ctrl+T) \u2014 this makes it easier to add new rows later without breaking your formulas.<\/p>\n<h3>Step 2: enter your investment data<\/h3>\n<p>Starting in row 2, enter each investment on its own row. Type the name in column A, the total cost in column B, and the net return (total revenue or ending value) in column C. Use consistent currency formatting across both financial columns: select columns B and C, right-click, choose \u201cFormat Cells,\u201d and select Currency with 2 decimal places.<\/p>\n<h3>Step 3: write the ROI formula<\/h3>\n<p>Click into cell D2 and type the formula: <strong>=(C2-B2)\/B2<\/strong>. This subtracts your cost from your return, then divides by the cost to give you ROI as a decimal. Select Enter. If you formatted your data as a Table in Step 1, Excel will automatically fill the formula down for every row you add.<\/p>\n<h3>Step 4: format the result as a percentage<\/h3>\n<p>Select column D, right-click, and choose \u201cFormat Cells.\u201d Under the Number tab, select Percentage and set decimal places to 1 or 2, whatever precision your stakeholders prefer. Your ROI values will now display as readable percentages instead of raw decimals.<\/p>\n<h3>Step 5: add conditional formatting for quick analysis<\/h3>\n<p>Highlight the ROI column, go to Home &gt; Conditional Formatting, and create two rules. First: format cells greater than 0 with a green fill and dark green text. Second: format cells less than 0 with a red fill and dark red text. Now every positive ROI glows green, and every loss stands out in red, making it easy to scan dozens of investments at a glance. You can also add Data Bars or Icon Sets for a more visual comparison across rows.<\/p>\n<a class=\"cta-button blue-button\" aria-label=\"Get started with monday.com\" href=\"https:\/\/auth.monday.com\/users\/sign_up_new\" target=\"_blank\">Get started with monday.com<\/a>\n"}]},{"main_heading":"What ROI does and doesn\u2019t measure","content_block":[{"acf_fc_layout":"text","content":"<p>ROI is powerful precisely because it\u2019s simple. But that simplicity comes with trade-offs. Understanding where the formula needs support helps you make more accurate decisions \u2014 and know when to bring in additional metrics. Does ROI account for the time value of money? No, and that\u2019s just one of several gaps worth knowing about.<\/p>\n<p>Here are the key limitations to consider before relying on ROI as your only measure:<\/p>\n<ul>\n<li><strong>Does not account for the time value of money:<\/strong> A 50% return over 1 year is far more valuable than a 50% return over 10 years. The basic ROI formula treats both identically. For time-adjusted analysis, use annualized ROI or net present value (NPV).<\/li>\n<li><strong>Ignores risk:<\/strong> Two investments can show identical ROI numbers while carrying vastly different risk profiles. A government bond and a startup investment might both return 15%, but the probability of achieving that return differs dramatically.<\/li>\n<li><strong>Can be manipulated by cost allocation:<\/strong> Different teams may define \u201ccost of investment\u201d differently. Include only direct costs, and your ROI looks stellar. Include overhead, labor, and opportunity costs, and the picture changes.<\/li>\n<li><strong>No standardized definition across organizations:<\/strong> Marketing teams, finance teams, and operations teams often calculate ROI using slightly different inputs \u2014 which makes cross-departmental comparisons unreliable without agreed-upon definitions.<\/li>\n<li><strong>Provides a static snapshot:<\/strong> A single ROI calculation captures one moment in time. It won\u2019t tell you if returns are trending up or down, or if a project that looked profitable last quarter is now underperforming.<\/li>\n<\/ul>\n<p>What if your ROI calculations could update automatically as new data comes in? That\u2019s exactly the shift from static spreadsheets to live, connected platforms \u2014 and we\u2019ll cover how that works shortly.<\/p>\n"}]},{"main_heading":"What is a good ROI percentage?","content_block":[{"acf_fc_layout":"text","content":"<p>\u201cGood\u201d ROI isn\u2019t a fixed number \u2014 it depends entirely on context. The industry you\u2019re in, the risk you\u2019re taking, the time horizon of the investment, and the opportunity cost of putting that money elsewhere all shape what counts as a worthwhile return.\u00a0A 10% annual return might be outstanding for a low-risk bond portfolio but underwhelming for a high-growth marketing campaign.<\/p>\n<p>Here are some general benchmarks to use as reference points:<\/p>\n<ul>\n<li><strong>Stock market:<\/strong> ~7-10% annually after inflation is the long-term historical average for diversified portfolios.<\/li>\n<li><strong>Real estate:<\/strong> 8-12% annual return is generally considered strong, though it varies by market and property type.<\/li>\n<li><strong>Marketing campaigns:<\/strong> A 5:1 return ratio (500% ROI) is a common benchmark, meaning $5 earned for every $1 spent.<\/li>\n<li><strong>Business projects:<\/strong> Any positive ROI may be worthwhile if it exceeds the company\u2019s cost of capital \u2014 the minimum return needed to justify the investment.<\/li>\n<\/ul>\n<p>How do you calculate a 10% ROI? Rearrange the formula: if you need a 10% return on a $50,000 investment, you need $5,000 in net profit. The required return equals (Target ROI% \/ 100) x Cost of Investment. This works for setting performance targets \u2014 you can calculate exactly how much revenue a campaign or project needs to generate to hit your threshold.<\/p>\n<p>When comparing ROI across investments with different holding periods, always annualize the returns first. A 30% total return over 3 years is roughly 9.1% annualized \u2014 which you can then compare directly against a 12% annual return on a 1-year investment.<\/p>\n"}]},{"main_heading":"Make your Excel ROI calculator dynamic","content_block":[{"acf_fc_layout":"text","content":"<p>A basic ROI spreadsheet gets the job done for one-off calculations, but it becomes more powerful when you add interactive features. These enhancements turn a static table into a flexible analysis dashboard \u2014 all within Excel.<\/p>\n<p>Here are 4 features that add real analytical depth:<\/p>\n<ul>\n<li><strong>IF formulas for instant labels:<\/strong> Add a column with <strong>=IF(D2&gt;=0.1,&#8221;Meets Target&#8221;,&#8221;Below Target&#8221;)<\/strong> to instantly flag which investments hit your ROI threshold. Change the 0.1 to whatever target percentage your team has set.<\/li>\n<li><strong>Dropdown menus for categorization:<\/strong> Use Data Validation to create a dropdown in a \u201cCategory\u201d column (marketing, operations, capital expenditure). This lets you filter and compare ROI by investment type without building separate spreadsheets.<\/li>\n<li><strong>SUM and AVERAGE for portfolio-level metrics:<\/strong> Add summary rows using <strong>=AVERAGE(D2:D20)<\/strong> for your portfolio\u2019s average ROI and <strong>=SUM(C2:C20)-SUM(B2:B20)<\/strong> for total net profit across all investments.<\/li>\n<li><strong>Charts for visual comparison:<\/strong> Select your Investment Name and ROI columns, insert a bar chart, and you\u2019ve got a visual ranking of your strongest and weakest investments. Add a reference line at your target ROI to see which investments clear the bar.<\/li>\n<\/ul>\n<p>These Excel enhancements help \u2014 but they still require manual updates every time your data changes. Every new expense entry, revenue adjustment, or project milestone means opening the spreadsheet, updating cells, and re-checking formulas. For teams tracking ROI across more than a handful of projects, that manual loop becomes the bottleneck.<\/p>\n"}]},{"main_heading":"How monday AI Workspace replaces manual ROI tracking","content_block":[{"acf_fc_layout":"text","content":"<p>Excel works for one-time ROI calculations. Tracking return on investment across multiple projects, departments, or quarters reveals the limits of a static spreadsheet. Version control issues, broken formulas, and the constant need to re-enter data are the real costs of manual tracking. Anyone doing <a href=\"https:\/\/monday.com\/blog\/project-management\/project-cost-tracking\/\" target=\"_blank\" rel=\"noopener\">project cost tracking<\/a> manually knows these friction points don\u2019t show up in any ROI formula.<\/p>\n<p>monday AI Workspace eliminates those friction points by connecting your financial data to live, auto-updating calculations. Here\u2019s how the platform replaces each piece of the Excel workflow:<\/p>\n<ul>\n<li><strong>Formula columns and<\/strong> <a href=\"https:\/\/monday.com\/features\/dashboards\" target=\"_blank\" rel=\"noopener\"><strong>dashboards<\/strong><\/a><strong>:<\/strong> Replace manual Excel formulas with <a href=\"https:\/\/support.monday.com\/hc\/en-us\/articles\/360003340799-The-Formula-Column\" target=\"_blank\" rel=\"noopener\">formula columns<\/a> that auto-calculate ROI, net profit, and return ratios across every row. Portfolio-level dashboards display live metrics for stakeholders \u2014 no one needs to request an updated spreadsheet<\/li>\n<li><a href=\"https:\/\/monday.com\/features\/automations\" target=\"_blank\" rel=\"noopener\"><strong>Automations<\/strong><\/a><strong>:<\/strong> When project costs or revenue figures change, ROI recalculates instantly. Set up automations to notify your team when an investment drops below a target threshold or when a project hits a milestone that impacts its return<\/li>\n<li><strong>monday vibe:<\/strong> Need a custom ROI calculator app? Describe what you want in plain language and monday vibe builds it for you \u2014 no coding, no complex spreadsheet macros. You get a tailored financial tracking interface in minutes<\/li>\n<li><strong>monday agents:<\/strong> AI agents generate financial reports on schedule, surface at-risk investments so teams can act early, and track metrics progress against goals automatically. Instead of pulling numbers into a quarterly deck, the data is already waiting for you<\/li>\n<li><strong>Excel import and integrations:<\/strong> Already have years of ROI data in spreadsheets? Import existing Excel files directly into the platform. Integrations with Salesforce, HubSpot, and other revenue sources mean your data flows in automatically<\/li>\n<\/ul>\n<p>The results speak for themselves. Customers report an average 8x ROI from using the platform, with $250,000 saved annually to reinvest elsewhere. An independent <a href=\"https:\/\/monday.com\/p\/forrester-tei\/\" target=\"_blank\" rel=\"noopener\">Forrester Total Economic Impact study<\/a> found a payback period of less than 4 months. Whether you\u2019re tracking campaign performance with an <a href=\"https:\/\/monday.com\/templates\/expense-tracking\" target=\"_blank\" rel=\"noopener\">expense tracking template<\/a> or monitoring departmental budgets with a <a href=\"https:\/\/monday.com\/templates\/budget-tracker\" target=\"_blank\" rel=\"noopener\">budget tracker template<\/a>, the platform keeps every number current without the manual overhead.<\/p>\n"}]},{"main_heading":"","content_block":[{"acf_fc_layout":"image","image_type":"normal","image":355055,"image_link":""}]},{"main_heading":"","content_block":[{"acf_fc_layout":"text","content":"<a class=\"cta-button blue-button\" aria-label=\"Get started with monday.com\" href=\"https:\/\/auth.monday.com\/users\/sign_up_new\" target=\"_blank\">Get started with monday.com<\/a>\n"}]},{"main_heading":"Track every dollar and measure what matters","content_block":[{"acf_fc_layout":"text","content":"<p>ROI is one of the most essential metrics in business \u2014 and now you have the formulas, variations, and step-by-step instructions to calculate it confidently in Excel. From basic net profit calculations to annualized returns and dynamic spreadsheet features, you\u2019re equipped to evaluate any investment and present the numbers that drive decisions.<\/p>\n<p>That\u00a0said, Excel has a ceiling. When your team is tracking ROI across dozens of projects, campaigns, and departments, a connected platform keeps everything accurate and accessible in real time. monday AI Workspace brings your ROI formula, financial data, and stakeholder reporting into one workspace \u2014 with live dashboards, automated recalculations, and AI-powered insights that replace the manual spreadsheet cycle entirely.<\/p>\n<a class=\"cta-button blue-button\" aria-label=\"Get started with monday.com\" href=\"https:\/\/auth.monday.com\/users\/sign_up_new\" target=\"_blank\">Get started with monday.com<\/a>\n"}]},{"main_heading":"","content_block":[{"acf_fc_layout":"text","content":"<div class=\"accordion faq\" id=\"faq-faqs\">\n  <h2 class=\"accordion__heading section-title text-left\">FAQs<\/h2>\n    <div class=\"accordion__item\">\n    <a class=\"accordion__button d-block\" data-toggle=\"collapse\" data-parent=\"#faq-faqs\" href=\"#q-faqs-1\"\n      aria-expanded=\"false\">\n      <h3 class=\"accordion__question\">What is the formula for calculating ROI?        <svg class=\"angle-arrow angle-arrow--down\" width=\"32\" height=\"32\" viewBox=\"0 0 32 32\" fill=\"none\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\">\n          <path fill-rule=\"evenodd\" clip-rule=\"evenodd\" d=\"M16.5303 20.8839C16.2374 21.1768 15.7626 21.1768 15.4697 20.8839L7.82318 13.2374C7.53029 12.9445 7.53029 12.4697 7.82318 12.1768L8.17674 11.8232C8.46963 11.5303 8.9445 11.5303 9.2374 11.8232L16 18.5858L22.7626 11.8232C23.0555 11.5303 23.5303 11.5303 23.8232 11.8232L24.1768 12.1768C24.4697 12.4697 24.4697 12.9445 24.1768 13.2374L16.5303 20.8839Z\" fill=\"black\"\/>\n        <\/svg>\n      <\/h3>\n    <\/a>\n    <div id=\"q-faqs-1\" class=\"accordion__answer collapse collapse--md\" data-parent=\"#faq-faqs\">\n      <p>The formula for calculating ROI is (Net Profit \/ Cost of Investment) x 100. This gives you a percentage that shows how much return you earned relative to what you spent.<\/p>\n    <\/div>\n  <\/div>\n    <div class=\"accordion__item\">\n    <a class=\"accordion__button d-block\" data-toggle=\"collapse\" data-parent=\"#faq-faqs\" href=\"#q-faqs-2\"\n      aria-expanded=\"false\">\n      <h3 class=\"accordion__question\">What is a good ROI percentage?        <svg class=\"angle-arrow angle-arrow--down\" width=\"32\" height=\"32\" viewBox=\"0 0 32 32\" fill=\"none\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\">\n          <path fill-rule=\"evenodd\" clip-rule=\"evenodd\" d=\"M16.5303 20.8839C16.2374 21.1768 15.7626 21.1768 15.4697 20.8839L7.82318 13.2374C7.53029 12.9445 7.53029 12.4697 7.82318 12.1768L8.17674 11.8232C8.46963 11.5303 8.9445 11.5303 9.2374 11.8232L16 18.5858L22.7626 11.8232C23.0555 11.5303 23.5303 11.5303 23.8232 11.8232L24.1768 12.1768C24.4697 12.4697 24.4697 12.9445 24.1768 13.2374L16.5303 20.8839Z\" fill=\"black\"\/>\n        <\/svg>\n      <\/h3>\n    <\/a>\n    <div id=\"q-faqs-2\" class=\"accordion__answer collapse collapse--md\" data-parent=\"#faq-faqs\">\n      <p>A good ROI percentage depends on the investment type and industry. For stock market investments, 7-10% annually is a common benchmark, while marketing campaigns often target a 5:1 return ratio (500% ROI).<\/p>\n    <\/div>\n  <\/div>\n    <div class=\"accordion__item\">\n    <a class=\"accordion__button d-block\" data-toggle=\"collapse\" data-parent=\"#faq-faqs\" href=\"#q-faqs-3\"\n      aria-expanded=\"false\">\n      <h3 class=\"accordion__question\">How do you calculate a 10% ROI?        <svg class=\"angle-arrow angle-arrow--down\" width=\"32\" height=\"32\" viewBox=\"0 0 32 32\" fill=\"none\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\">\n          <path fill-rule=\"evenodd\" clip-rule=\"evenodd\" d=\"M16.5303 20.8839C16.2374 21.1768 15.7626 21.1768 15.4697 20.8839L7.82318 13.2374C7.53029 12.9445 7.53029 12.4697 7.82318 12.1768L8.17674 11.8232C8.46963 11.5303 8.9445 11.5303 9.2374 11.8232L16 18.5858L22.7626 11.8232C23.0555 11.5303 23.5303 11.5303 23.8232 11.8232L24.1768 12.1768C24.4697 12.4697 24.4697 12.9445 24.1768 13.2374L16.5303 20.8839Z\" fill=\"black\"\/>\n        <\/svg>\n      <\/h3>\n    <\/a>\n    <div id=\"q-faqs-3\" class=\"accordion__answer collapse collapse--md\" data-parent=\"#faq-faqs\">\n      <p>To calculate a 10% ROI, you need a net profit that equals 10% of your total investment cost. For a $50,000 investment, that means earning $5,000 in net profit \u2014 so your total return would need to reach $55,000.<\/p>\n    <\/div>\n  <\/div>\n    <div class=\"accordion__item\">\n    <a class=\"accordion__button d-block\" data-toggle=\"collapse\" data-parent=\"#faq-faqs\" href=\"#q-faqs-4\"\n      aria-expanded=\"false\">\n      <h3 class=\"accordion__question\">What is the difference between ROI and annualized ROI?        <svg class=\"angle-arrow angle-arrow--down\" width=\"32\" height=\"32\" viewBox=\"0 0 32 32\" fill=\"none\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\">\n          <path fill-rule=\"evenodd\" clip-rule=\"evenodd\" d=\"M16.5303 20.8839C16.2374 21.1768 15.7626 21.1768 15.4697 20.8839L7.82318 13.2374C7.53029 12.9445 7.53029 12.4697 7.82318 12.1768L8.17674 11.8232C8.46963 11.5303 8.9445 11.5303 9.2374 11.8232L16 18.5858L22.7626 11.8232C23.0555 11.5303 23.5303 11.5303 23.8232 11.8232L24.1768 12.1768C24.4697 12.4697 24.4697 12.9445 24.1768 13.2374L16.5303 20.8839Z\" fill=\"black\"\/>\n        <\/svg>\n      <\/h3>\n    <\/a>\n    <div id=\"q-faqs-4\" class=\"accordion__answer collapse collapse--md\" data-parent=\"#faq-faqs\">\n      <p>Standard ROI measures total return regardless of time period, while annualized ROI adjusts the return to reflect a per-year rate. Annualized ROI is more useful when comparing investments held for different durations because it normalizes the time factor.<\/p>\n    <\/div>\n  <\/div>\n    <div class=\"accordion__item\">\n    <a class=\"accordion__button d-block\" data-toggle=\"collapse\" data-parent=\"#faq-faqs\" href=\"#q-faqs-5\"\n      aria-expanded=\"false\">\n      <h3 class=\"accordion__question\">Does ROI account for the time value of money?        <svg class=\"angle-arrow angle-arrow--down\" width=\"32\" height=\"32\" viewBox=\"0 0 32 32\" fill=\"none\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\">\n          <path fill-rule=\"evenodd\" clip-rule=\"evenodd\" d=\"M16.5303 20.8839C16.2374 21.1768 15.7626 21.1768 15.4697 20.8839L7.82318 13.2374C7.53029 12.9445 7.53029 12.4697 7.82318 12.1768L8.17674 11.8232C8.46963 11.5303 8.9445 11.5303 9.2374 11.8232L16 18.5858L22.7626 11.8232C23.0555 11.5303 23.5303 11.5303 23.8232 11.8232L24.1768 12.1768C24.4697 12.4697 24.4697 12.9445 24.1768 13.2374L16.5303 20.8839Z\" fill=\"black\"\/>\n        <\/svg>\n      <\/h3>\n    <\/a>\n    <div id=\"q-faqs-5\" class=\"accordion__answer collapse collapse--md\" data-parent=\"#faq-faqs\">\n      <p>No, the basic ROI formula does not account for the time value of money. It treats every dollar the same regardless of when it was earned. For time-adjusted returns, use annualized ROI or net present value (NPV) instead.<\/p>\n    <\/div>\n  <\/div>\n    <div class=\"accordion__item\">\n    <a class=\"accordion__button d-block\" data-toggle=\"collapse\" data-parent=\"#faq-faqs\" href=\"#q-faqs-6\"\n      aria-expanded=\"false\">\n      <h3 class=\"accordion__question\">What Excel functions are used for ROI calculations?        <svg class=\"angle-arrow angle-arrow--down\" width=\"32\" height=\"32\" viewBox=\"0 0 32 32\" fill=\"none\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\">\n          <path fill-rule=\"evenodd\" clip-rule=\"evenodd\" d=\"M16.5303 20.8839C16.2374 21.1768 15.7626 21.1768 15.4697 20.8839L7.82318 13.2374C7.53029 12.9445 7.53029 12.4697 7.82318 12.1768L8.17674 11.8232C8.46963 11.5303 8.9445 11.5303 9.2374 11.8232L16 18.5858L22.7626 11.8232C23.0555 11.5303 23.5303 11.5303 23.8232 11.8232L24.1768 12.1768C24.4697 12.4697 24.4697 12.9445 24.1768 13.2374L16.5303 20.8839Z\" fill=\"black\"\/>\n        <\/svg>\n      <\/h3>\n    <\/a>\n    <div id=\"q-faqs-6\" class=\"accordion__answer collapse collapse--md\" data-parent=\"#faq-faqs\">\n      <p>The most common Excel functions for ROI calculations are basic arithmetic division (=B2\/B3), SUM for totaling costs and returns, and the RATE function for annualized return calculations. You can also use IF functions to flag investments that meet a target ROI threshold.<\/p>\n    <\/div>\n  <\/div>\n    <div class=\"accordion__item\">\n    <a class=\"accordion__button d-block\" data-toggle=\"collapse\" data-parent=\"#faq-faqs\" href=\"#q-faqs-7\"\n      aria-expanded=\"false\">\n      <h3 class=\"accordion__question\">Can monday AI Workspace replace Excel for ROI tracking?        <svg class=\"angle-arrow angle-arrow--down\" width=\"32\" height=\"32\" viewBox=\"0 0 32 32\" fill=\"none\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\">\n          <path fill-rule=\"evenodd\" clip-rule=\"evenodd\" d=\"M16.5303 20.8839C16.2374 21.1768 15.7626 21.1768 15.4697 20.8839L7.82318 13.2374C7.53029 12.9445 7.53029 12.4697 7.82318 12.1768L8.17674 11.8232C8.46963 11.5303 8.9445 11.5303 9.2374 11.8232L16 18.5858L22.7626 11.8232C23.0555 11.5303 23.5303 11.5303 23.8232 11.8232L24.1768 12.1768C24.4697 12.4697 24.4697 12.9445 24.1768 13.2374L16.5303 20.8839Z\" fill=\"black\"\/>\n        <\/svg>\n      <\/h3>\n    <\/a>\n    <div id=\"q-faqs-7\" class=\"accordion__answer collapse collapse--md\" data-parent=\"#faq-faqs\">\n      <p>Yes, the platform replaces manual Excel ROI tracking with formula columns that auto-calculate, dashboards that display live metrics, and automations that update figures whenever project data changes. Teams report an average 8x ROI from using monday AI Workspace.<\/p>\n    <\/div>\n  <\/div>\n  <script type='application\/ld+json'>{\n    \"@context\": \"https:\\\/\\\/schema.org\",\n    \"@type\": \"FAQPage\",\n    \"mainEntity\": [\n        {\n            \"@type\": \"Question\",\n            \"name\": \"What is the formula for calculating ROI?\",\n            \"acceptedAnswer\": {\n                \"@type\": \"Answer\",\n                \"text\": \"<p>The formula for calculating ROI is (Net Profit \\\/ Cost of Investment) x 100. This gives you a percentage that shows how much return you earned relative to what you spent.<\\\/p>\\n\"\n            }\n        },\n        {\n            \"@type\": \"Question\",\n            \"name\": \"What is a good ROI percentage?\",\n            \"acceptedAnswer\": {\n                \"@type\": \"Answer\",\n                \"text\": \"<p>A good ROI percentage depends on the investment type and industry. 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It treats every dollar the same regardless of when it was earned. For time-adjusted returns, use annualized ROI or net present value (NPV) instead.<\\\/p>\\n\"\n            }\n        },\n        {\n            \"@type\": \"Question\",\n            \"name\": \"What Excel functions are used for ROI calculations?\",\n            \"acceptedAnswer\": {\n                \"@type\": \"Answer\",\n                \"text\": \"<p>The most common Excel functions for ROI calculations are basic arithmetic division (=B2\\\/B3), SUM for totaling costs and returns, and the RATE function for annualized return calculations. 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Teams report an average 8x ROI from using monday AI Workspace.<\\\/p>\\n\"\n            }\n        }\n    ]\n}<\/script><\/div>\n\n"}]}]}],"show_sidebar_sticky_banner":false,"disclaimer":"","post_date":"20260803"},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.6 (Yoast SEO v28.0) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>ROI Formula in Excel: Calculate Return on Investment (2026)<\/title>\n<meta name=\"description\" content=\"Learn how to calculate return on investment in Excel using formulas, ROI, and practical examples to measure project and business performance\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/monday.com\/blog\/task-management\/roi-formula-excel\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" 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