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ROI & Break-Even Calculator

Calculate return on investment and annualised return, or solve for break-even unit volume.

  • roi
  • return on investment
  • break-even
  • profit
  • margin
  • cagr
  • annualised

About ROI & Break-Even Calculator

Two related questions that come up constantly when evaluating an investment or a business decision. ROI (return on investment) is "what did I get back, as a percentage of what I put in?" — useful for comparing past or expected returns side by side. Annualised ROI (also called CAGR — compound annual growth rate) puts returns on a per-year basis so a 50% return over 5 years can be compared against a 20% return over 2 years; the answer might surprise you.

Break-even is the operational counterpart: given fixed costs (rent, salaries, equipment that don't scale with volume), the price you can charge per unit, and the variable cost of producing each unit, how many units do you have to sell before you stop losing money? It's the cleanest sanity check for a business model — if the break-even volume is implausibly high, the model needs work.

How to use

Switch between the ROI and Break-even tabs at the top. **ROI**: enter the initial investment, the final value (today or projected), and optionally the number of years held. Profit and ROI percentage compute regardless; annualised ROI requires a positive holding period. **Break-even**: enter fixed costs (one-time or per-period), the price you'll sell each unit for, and the variable cost per unit (materials, fulfilment, payment processing). The calculator returns the units needed to cover fixed costs and the revenue at that point.

All values respect the selected currency. Contribution margin (price minus variable cost) is shown both in absolute and percentage form — a low contribution margin means each sale chips away at fixed costs slowly, so even modest fixed costs need high volume to break even.

Frequently asked questions

  • What's the difference between ROI and annualised ROI?

    ROI is total return: (final − initial) / initial. It tells you "I made 50% on this." Annualised ROI converts that into an equivalent compound annual rate, so you can compare investments held for different lengths of time. A 50% ROI over 5 years annualises to about 8.4% per year; the same 50% over 2 years annualises to 22.5%. The second is the much better investment despite the same total return.

  • How is annualised ROI calculated?

    It's the geometric mean: (final / initial)^(1 / years) − 1, expressed as a percentage. This is the same formula as CAGR — compound annual growth rate. It answers "what constant annual rate would have grown my initial investment to the final value over this number of years?" The geometric mean is the correct way to average growth rates over time; the arithmetic mean overstates returns when there's volatility.

  • What is contribution margin?

    Contribution margin is the amount each unit sold contributes toward covering fixed costs. It's the unit price minus the variable cost per unit. If you sell something for $25 and it costs $10 in materials and fulfilment, your contribution margin is $15. Once you've sold enough units for the cumulative contribution to cover fixed costs, every subsequent unit's contribution drops to the bottom line as profit.

  • Why does the calculator show break-even units rounded up?

    Because you can't sell a fractional unit in most businesses. If exact break-even is 333.4 units, you actually need 334 sales to clear it — the 333rd sale leaves you a small fraction below break-even. The "exact" decimal value is shown below for reference; the headline figure is the smallest whole-unit count that gets you above water.

  • What if my price doesn't exceed variable cost?

    Then there's no break-even — every additional sale loses you more money on top of the fixed cost base. The contribution margin is zero or negative, and the calculator shows "—" for units to break even. Either find a way to lower the variable cost, raise the price, or accept that the unit economics don't work and the business model needs to change.

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