stupid question... how do you calculate ROI??

[Jurollo]

This is a stupid question to begin with, but how do you calculate your ROI? Straighforward and simple answer is all I need then I can close this baby down. Thanks.

[Prickly Pete]

Total winnings divided by total cost.

For example, suppose you played 6 10+1 SNGs and got 1 1st and 1 2nd (assuming 50/30/20 payout structure).

Your total winnings equal 80 (50 for the 1st + 30 for the 2nd)

Your total cost is 66 (6 * 11)

80/66 = 1.21 or a 21% ROI

[La Brujita]

Forgive me for the stupid question; I don't usually worry about ROI but don't you use winnings in the numerator ie 39+19 rather than 50+30.

Please advise either way.

[Prickly Pete]

Well Brujita, you've got me questioning here, but I think what I had is right. Granted, I'm using my business school definition of ROI - I just assumed it would be the same as the poker school definition (not that I have a degree [img]/images/graemlins/grin.gif[/img]).

That being the case, ROI is Return on Investment. 6 games require an investment of $66 in the denominator. The return has to be total cash winnings (80 not 58) in the numerator.

And yes I agree with your philosophy on ROI not really mattering (at least I think it was you) as much as hourly earn. But it can be an interesting tool to see how you've fared against the game at different buyins.

[Profit]

Here's my thoughts. If you really want to have some type of return %, using the proftis in the numerator makes sense to me.

Say you enter a 10+1 and lose. your profit is -11, numerator is 11 for -100%.

if you just use the return and not profit, your numerator woud be 0, your denominator would be 11 for a 0% return.

That's not a true 0% return, if i somehow came out of a tourney with $11, that would be a 0% return.

[Prickly Pete]

Profit, you are of course right. My brain's freezing I think. In my example before, it should be:

Winnings - Costs / Costs

or

80 - 66 / 66 for 21%

I'm just used to doing 80/66 and dropping the 1 from the 1.21 on my calculator.

[La Brujita]

This is how I calculate my ROI as well. Glad we are all on the same page and sorry if my first post wasn't clear.

[Profit]

haha, ya i do it the same way (subtracting the 1), just wanted to make sure others saw it clearly

[Bozeman]

profit/cost=(39+19-11-11-11-11)/66=21%

or

profit/cost=gross/cost-1=21%, as you did it.