In investing it is often necessary to evaluate how well an investment is performing. It is always desirable for an investment, be a stock, mutual fund, or utility, to be generating more revenue than the initial cost of investment. One way of performing such an assessment is by calculating the return on investment, or ROI.At a basic level, the calculation of an ROI can be done simply and by hand.
. The first step is to calculate the return of the investment. This is done by subtracting the cost of the investment from the overall gain. This difference is then divided by the cost of the investment. What this gives the investor is a percentage reflecting the degree to which the investment has exceeded or fallen short of the initial investment.While this calculation can be performed rather simply, it is often of more value to have an automated process. By automating the calculation, frequent assessments can be made more easily as well as assessments of a large number of investments. Microsoft Excel, a spreadsheet program which data input and manipulation, is one such resource for automating the process. Quick calculations of ROI can be done using premade templates. These templates can be located and downloaded from a number of sources on the Internet.The primary repository for Microsoft Excel templates is on the Microsoft Office website. The Capital Budgeting template, provided by BearingPoint, allows the investor to track return on investment values over time as well as net present value. It can be obtain from http://office.microsoft.com/en-us/templates/capital-budgeting-return-on-investment-roi-analysis-TC001158989.aspx.Another freely available source of Microsoft Excel ROI templates can be found at http://exceltemplates.net/category/financial/roi/. There are a variety of templates available on this website which can be tailored to the individual needs of the investor. These include training cost ROIs, truck upgrade ROIs and social ROIs.Additional sources of free return on investment Microsoft Excel templates can be found in a variety of sources online. For the savvy investor, these tools are a critical component in tracking progress and making wise investment decisions. More reference links: http://office.microsoft.com/en-us/templates/capital-budgeting-return-on-investment-roi-analysis-TC001158989.aspx http://exceltemplates.net/category/financial/roi/
