# How To Calculate Return On Invesment (ROI)

Last week we looked at why it was good to use ROI rather than profit to determine whether a certain set of selections are working well. If you haven’t had a chance to read it then you can take a look here. This week I would like to show you how to calculate ROI. If you find maths a scary subject then please don’t worry. I can promise that you will be very happy when you learn how easy it is.

In order to calculate the ROI you will need to know a few pieces of information. You will need to know how much has been bet and how much has been returned. I think that it is important to clarify what we mean by how much has been returned. This is because depending on who is doing it the ‘return’ from a bet may or may not include the stake money.

Officially ‘return’ means the amount of money including the stake that you get back from your winning bets. If you bet £10 at odds of 2.0 then your return would be £20. Of this £20, £10 is what you bet and you have made a £10 profit.

We are actually only interested in the profit your bets have made not the return.

Here is the ROI calculation:

Profit Made divided by Amount Staked  = Return On Investment (ROI)

That’s it! It really is that simple!

Over the last month we may have placed £1000 in bets. At the end of month we work out our profit and we have made £450 in profit. In order to work out the ROI we do…

£450 divided by £1000 = 0.45

Our ROI is 0.45. To make this easier to read we want to turn it into a percentage. Doing this is simply a case of multiplying our ROI by 100.

0.45 multiplied by 100 = 45%