Fincrew Investment Returns Calculator
It’s a proven fact that having investments is one of the best ways of making money today. With that, not all assets are profitable. What’s more, not all investments are equally beneficial. So, how do you make the most prudent decision possible here? It is where our investment returns calculator shines! Using this powerful tool, you can more accurately calculate ROI or return on investment to determine if the capital gains you’ll get over a holding period are worth the expense. Thanks to that, you’ll be less likely to lose money on your investments! To better understand the potential of our return on investment calculator, let’s take a closer look at the return on investment or ROI in greater detail.
Return On Investment (ROI) – All You Need To Know
At its core, the ROI metric is a performance measure used to estimate the efficiency with which investment can yield returns, especially compared to other different investments. Essentially, the ROI metric aims to directly measure the returns of your investment concerning how much it costs to set up in the first place. The resulting value of ROI is by percentage or, in some cases, a ratio.
How To Calculate Return On Investment Without a Calculator
While great tools like our investment returns calculator can help you achieve this task effortlessly, you may choose to carry out the exercise independently. One advantage you’ll enjoy down that road is that the return on investment formula is pretty straightforward. It would be:
Current Value of Investment – Cost of the investment = Return on Investment (ROI) Cost of the Investment
- Current Value of Investment refers to the annual return you were able to accrue from your investment and,
- Cost of Investment refers to the amount of money you initially put into the investment.
- Here’s a practical application of the formula.
Assuming that Ahmad invested a sum of RM 10 000 in Oh So Good Spa and Resorts Inc. in 2020 and then sold all his shares in 2021 for RM 12 000, his annual ROI would be;
- 12, 000 – 10, 000 = 20%
- 10, 000
So, knowing his ROI, you can then compare the proceeds that Ahmad got here to what he might’ve called had he ventured into other projects. For example, assume that Ahmad had invested RM 20 000 in The Best Treads Inc. in 2015 before finally selling his shares in 2021 to make RM 35 000. In this instance, he would’ve had an ROI of 75%.
Understanding (and Complementing) The Limitations Of ROI
The examples of Ahmad above offer a little glimpse into the shortcomings of the return on investment formula. Now, although the size of Ahmad’s investment in the second example was twice that of his first, it took him six years to make a purchase and profit from it. On the other hand, it took him just one year to do the same with his first investment. If Ahmad accurately accounted for the multi-annual ROI profit in his second investment accordingly, he would divide that ROI by the length of time it took him. So, 75% divided by 6 equals 12.5% per annum. With this information, it becomes clear that even though Ahmad’s second investment seemed to be profitable, his first investment was more efficient. In light of this, it’s possible to complement these shortcomings of ROI calculation by using it in tandem with the rate of return or RoR formula. It helps significantly as the rate of return factors in the holding period into its calculations. You can make the equation even more balanced by accounting for the forces of inflation by using net present value (NPV) in your calculations. It will make distinguishing between a positive and negative ROI a more accurate and detailed affair for you. But as you start to see, things can get very complicated if you’re doing all of these calculations by hand. Trusting a relevant return on investment calculator like ours always pays off.
Using The FinCrew Return On Investment Calculator Tool
Some reasons our tool should always be your first point of call when you want to calculate ROI are;
- We Eliminate the Need For Overly Complex Marketing Assets
Not everyone looking to invest is finance-savvy, and our tool accurately accounts for that fact. It is because we understand that, sometimes, all you want is a straightforward tool to help you crunch the numbers and give you clear and concise results. We’ve designed our ROI calculator to be free of ambiguity in light of this. You have to complete the required fields, click on “Submit”, get your result, and go about your business. We believe that finance management should be an easy affair for every Malaysian, and we’ve built this tool on that concept.
- We Eliminate Human Error
From the details we provided above, it’s easy to see how properly accounting for every variable so that you get an accurate annual return on investment value can lead to human error. Even if you’re using a spreadsheet tool for your calculations, it takes one input error to throw your entire estimates off balance. However, don’t worry about such problems using our tool. Because our user interface isn’t complex, you are less likely to make mistakes, but you can readily spot them if you happen to.
- We Offer a User-Friendly Platform for Your Calculations
Make your ROI calculations easily on a user-friendly platform with all the assistive features you need, and enjoy the experience of planning for your next significant investment in style!