Accounting Rate of Return (ARR) Calculator

Accounting rate of return, also known as the Average rate of return, or ARR is the percentage of profit during a period from the investment. The period can be of any range based on the users requirement. If total return (revenue - expense including depreciation) over n years is 70$ out of a total investment of 100$, then the ARR is 70%.
ARR = Incremental Revenue - Incremental Expenses (Including Depreciation)/Initial Investment

Find Average Rate of Return

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Accounting rate of return, also known as the Average rate of return, or ARR is the percentage of profit during a period from the investment. The period can be of any range based on the users requirement. If total return (revenue - expense including depreciation) over n years is 70$ out of a total investment of 100$, then the ARR is 70%.
ARR = Incremental Revenue - Incremental Expenses (Including Depreciation)/Initial Investment

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Formula:

Depreciation = (Initial Investment - Final Investment) / No. of Years Profit = (Incremental Revenue - Incremental Expenses) / Depreciation ARR = Profit / Initial Investment

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