How To Calculate ROI (Return On Investment)

And most businesses are unlikely to produce exactly $100k every year to the investors. Some

businesses will grow the profits year after year. Others might see the profits decline as the business matures and heads out of business.

So the proper way to calculate a return is using the "cash flow method."

Here's how you do it.

1. Get a spreadsheet, excel will do, although increasingly I recommend Google docs spreadsheet because it's simpler to share with others.