roi-calculator

ROI Calculator

Overview

Calculates and presents clear ROI analysis for projects, services, or investments. Creates stakeholder-ready reports with hard numbers.

Workflow

Step 1: Gather the Numbers

Ask the user:

1. What's the investment? (service, tool, project, hire)
2. Total cost: One-time + ongoing monthly/annual costs
3. Current state: Time spent, cost of current process, error rate
4. Expected improvement: Time saved, revenue gained, errors reduced
5. Timeline: When do benefits start? Over what period?

Step 2: Calculate Core Metrics

ROI Formula:

ROI = ((Total Benefits - Total Costs) / Total Costs) × 100

Key Metrics to Calculate:

• Net benefit = Total benefits - Total costs
• ROI % = Net benefit / Total costs × 100
• Payback period = Total costs / Monthly benefit
• Monthly recurring savings
• Annual impact
• Break-even point

For Time Savings:

Hours saved per month × Hourly rate = Monthly savings
Monthly savings × 12 = Annual savings

For Revenue Impact:

New revenue enabled + Revenue from freed-up time = Total revenue impact

Step 3: Build the Analysis

Output Format

# ROI Analysis: [Investment Name]

## Executive Summary
**Bottom line**: For every $1 invested, you get $[X] back.
- **Total investment**: $[X]
- **Annual return**: $[X]
- **ROI**: [X]%
- **Payback period**: [X] months

## Cost Breakdown

| Cost Item | One-Time | Monthly | Annual |
|-----------|----------|---------|--------|
| [Item 1] | $X | $X | $X |
| [Item 2] | $X | $X | $X |
| **Total** | **$X** | **$X** | **$X** |

## Benefits Breakdown

| Benefit | Monthly Value | Annual Value | How Calculated |
|---------|-------------|-------------|----------------|
| Time savings | $X | $X | [X hrs × $X/hr] |
| Error reduction | $X | $X | [X errors × $X cost] |
| Revenue increase | $X | $X | [explanation] |
| **Total** | **$X** | **$X** | |

## 12-Month Projection

| Month | Cumulative Cost | Cumulative Benefit | Net Position |
|-------|----------------|-------------------|-------------|
| 1 | $X | $X | -$X |
| 3 | $X | $X | -$X |
| 6 | $X | $X | +$X |
| 12 | $X | $X | +$X |

## Break-Even Point
**Month [X]** — After this point, every month generates $[X] in net value.

## Conservative vs Optimistic Scenarios

| Scenario | ROI | Payback | Annual Return |
|----------|-----|---------|--------------|
| Conservative (50% of projected) | X% | X months | $X |
| **Expected** | **X%** | **X months** | **$X** |
| Optimistic (150% of projected) | X% | X months | $X |

## Recommendation
[Clear recommendation with confidence level]

Quality Checklist

• [ ] All assumptions stated explicitly
• [ ] Conservative estimate included
• [ ] Payback period calculated
• [ ] Monthly projection shows break-even
• [ ] Benefits are quantified (not just "saves time")
• [ ] Stakeholder-ready formatting