Project ROI Calculator

How to use this project ROI calculator

To calculate your project ROI, enter the revenue from your project, cost savings, and the total costs associated with the project. This includes capital costs, operating costs, and other project-related expenses. The calculator will instantly determine the ROI, indicating whether the project generates a profit relative to its costs.

Project ROI formula

Project ROI = (Revenue from Project – Project Cost) / Project Cost × 100

Here,

Revenue from Project = Project Revenue + Cost Savings

Project Cost = Capital Costs + Operating Costs + Other Project Costs

Understanding the project ROI result

The ideal project ROI will depend on the project's goals, industry, and scope. Generally,

• A high project ROI indicates that the project is highly profitable, generating significant revenue or savings compared to its costs.

A low or negative project ROI suggests that the project's costs are greater than its returns, meaning it may need optimization. If the value is negative, the project may need serious reconsideration because it generates a loss.

When to calculate project ROI

• After a project to evaluate its overall financial performance

• Before launching new projects to estimate potential profitability

• When comparing multiple projects to decide which offers the best return

• To assess the impact of cost-cutting measures on project profitability

How to calculate project ROI (with example)

Imagine that your company completed a project with the following data:

Project Revenue: $100,000

Cost Savings: $30,000

Capital Costs: $50,000

Operating Costs: $30,000

Other Project Costs: $10,000

You can calculate your project ROI as follows:

Project ROI = (Revenue from Project – Project Cost) / Project Cost × 100

Revenue from Project = 100,000 + 30,000 = $130,000

Project Cost = 50,000 + 30,000 + 10,000 = $90,000

Project ROI = (130,000 – 90,000) / 90,000 × 100 = 44.44%

In this example, your project ROI is 44.44%, meaning for every $1 spent on the project, you earned $0.44 in return.

How to improve your project ROI

• Streamline project processes to reduce operating costs and improve efficiency.

• Optimize resource allocation using tools to manage capital and expenses more effectively.

• Negotiate better deals with suppliers or vendors to lower your capital costs.

• Identify potential cost-saving opportunities, such as energy-efficient technology or alternative materials.

• Track project progress continuously to address budget overruns or inefficiencies that could reduce ROI.

• Focus on value-adding activities that boost the project’s revenue or savings.