ROI Calculator

The ROI (Return on Investment) Calculator is a tool designed to evaluate the financial impact of implementing a business solution. It measures cost reductions, productivity improvements, revenue generation, and risk avoidance to provide a comprehensive ROI value.

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Key Sections of the ROI Calculator

Cost Reduction

This section quantifies savings achieved by reducing resource utilization or task completion time.

Field Name	Description	Example Input
Resources required for task (No. of FTEs doing this task)	Total number of Full-Time Equivalents (FTEs) required for the task.	5
Average annual salary	Average yearly salary of each FTE performing the task.	$60,000
Time to do this task (Average % of time per person)	Proportion of time spent by an FTE on this task (as a percentage).	50% (0.5)
Time saved by product (% flow saves)	Percentage of time saved due to implementing the product/solution.	40% (0.4)
Cost of other resources (User licenses, etc.)	Additional costs incurred for resources such as software licenses.	$5,000

$$Cost Savings=(x×y×z)×w+v$$

$$Cost Savings=(5×0.5×60,000)×0.4+5,000$$

$$Cost Savings=(150,000)×0.4+5,000=60,000+5,000=65,000$$

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Revenue Generation

This section calculates the revenue growth driven by the solution.

Field Name	Description	Example Input
Annual revenue/turnover	Total yearly revenue of the business.	$1,000,000
Revenue increases (% increase in revenue)	Percentage growth in revenue attributed to the solution.	5% (0.05)
Saved revenue (% revenue losses avoided)	Percentage of revenue losses avoided by implementing the solution.	2% (0.02)

$$Revenue Increase=Annual Revenue×Revenue Increase (Percentage)$$

$$Revenue Increase =1,000,000×0.05=50,000$$

$$Saved Revenue (Percentage) = (Saved Revenue Amount / Annual Revenue) ​× 100$$

$$Saved Revenue (Percentage) = (20,000 / 1,000,000) ​× 100 = 2$$

$$Saved Revenue=1,000,000×0.02=20,000$$

$$Total Revenue Generation=50,000+20,000=70,000$$

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Risk Avoidance

This section measures the financial savings from avoiding penalties and retaining revenue.

Field Name	Description	Example Input
Annual revenue/turnover	Total yearly revenue of the business.	$1,000,000
Fines avoided	Monetary penalties avoided due to improved compliance or processes.	$10,000
Lost revenue avoided (% revenue losses avoided)	Percentage of potential revenue losses prevented.	3% (0.03)

$$Lost Revenue Avoided=Annual Revenue×Lost Revenue Avoided (Percenatge)$$

$$Lost Revenue Avoided=1,000,000×0.03=30,000$$

$$Total Risk Avoidance=Fines Avoided+Lost Revenue Avoided$$

$$Total Risk Avoidance=10,000+30,000=40,000$$

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Total ROI

The Total ROI combines all calculated components: cost savings, revenue generation, and risk avoidance.

$$TOTAL ROI=Cost Savings (a)+Revenue Generation (b)+Risk Avoidance (c)$$

$$TOTAL ROI=65,000+70,000+40,000=175,000$$