Enter the annual business profit ($) and the purchase price of the business ($) into the Return on Business Calculator. The calculator will evaluate and display the Return on Business.
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Return on Business Formula
The following formula is used to calculate the Return on Business.
ROB = AP / PP * 100
- Where ROB is the Return on Business (%)
- AP is the annual business profit ($)
- PP is the purchase price of the business ($)
How to Calculate Return on Business?
The following example problems outline how to calculate Return on Business.
Example Problem #1:
- First, determine the annual business profit ($).
- The annual business profit ($) is given as: 10,000.
- Next, determine the purchase price of the business ($).
- The purchase price of the business ($) is provided as: 200,000.
- Finally, calculate the Return on Business using the equation above:
ROB = AP / PP * 100
The values given above are inserted into the equation below and the solution is calculated:
ROB = 10,000 / 200,000 * 100 = 5 (%)
Example Problem #2:
For this problem, the variables needed are provided below:
annual business profit ($) = 60,000
purchase price of business ($) = 175,000
This example problem is a test of your knowledge on the subject. Use the calculator above to check your answer.
ROB = AP / PP * 100 = ?
