Introduction
ROI plays an important role in the progress of a business. A positive ROI leads to the success of your business. There is no doubt that every businessman or business owner wants an attractive ROI for his products. It is an interesting fact to know that the concept of ROI is about 100 years old and this is why it is considered the most important calculation for any business. However, not everyone can calculate it accurately. To make it easy for you, this blog highlights the amazing functionalities of gadgets for the product roi calculaton. Keep reading till the end to gain important information.
What Is a Product ROI Calculator?
It is an effective gadget to help you find out the return on investment of your business investments. When you start a business, you have to invest some amount of money to kick-start your business. For a successful business, it is important to recover the initial investments through sales of business products. a product ROI calculator helps you to know if your sales are enough to give back your initial investments. You can use a product ROI calculator for investments in your business.
What Is The Formula Of ROI Calculation Through ROI Calculator?
When calculating ROI through a calculator, you have to follow a simple old formula. This formula is given as below :
Current Cost – Beginning Cost / Beginning Cost = ROI
The current value of a product is the worth of the product in the present moment. It can also be called realized value. On the other hand, the beginning cost is the cost at which initial investments were made in the business.
Product ROI Calculator In Excel
You can also calculate ROI in Microsoft Excel. You just need to follow the steps listed below
- You have to type “Investment cost” in the first column
- Then you type “Money received from Investment” in the second column.
- The third column will give ROI value & you have to name it “ROI”
- In cell A2 you have to write the currency of your country and then write the investment cost. The same procedure with cell B2 should be repeated.
- For cell C2, you have to enter the formula for the previous two values such as B2/A2. You can click on the percentage symbol on the ribbon to get a result in percentage form
Pros & Cons Of Product ROI Calculator
Pros
- Simple and easy to use
- Excellent gadget to measure profits of a business
- Allows comparative analysis
- Measures performance of an investment in a business
Cons
- It doesn’t consider time factors
- It can’t be manipulated easily
Conclusion
Product ROI calculators are used most widely across the globe. If a company is getting a high ROI, it means that the company is going through its successful days. Investments are an important part of a business but only a successful business can earn back those investments. This blog has given an idea of a product ROI calculator. You can also consult a business expert regarding ROI calculation and its role in business.
