ROI Calculator User Guide
A simple guide to help you understand how to use this investment tool
What is the ROI Calculator?
The ROI Calculator is a tool that helps you work out which business projects are worth spending money on. It's like having a smart calculator that can tell you if a project will make or lose money.
ROI stands for "Return on Investment" - which basically means: if you spend £100 on a project, will you get back more than £100? If yes, it's probably a good investment!
Main Dashboard
What You'll See
When you first open the dashboard, you'll see four main numbers at the top:
- Total Projects: How many projects you're tracking
- Total Investment: How much money you've spent on all projects combined
- Average IRR: The average percentage of profit you're making (higher is better!)
- Average Risk Score: How risky your projects are on average (lower is safer)
Pie Charts and Graphs
Below the numbers, you'll see colourful charts that show:
- Projects by Status: Which projects are finished, in progress, or just ideas
- Projects by Risk: How many risky projects vs safe projects you have
Why This Matters
The dashboard gives you a quick snapshot of everything. It's like looking at your phone's home screen - you can see the most important information at a glance without having to dig through lots of details.
Projects Analysis Page
What This Page Does
This is where you can see detailed information about each project and work out if they're making money.
The Calculate Metrics Button
This is the most important button on this page! Here's how to use it:
- Tick the boxes next to the projects you want to check
- Click the yellow "Calculate Metrics" button
- Wait a few seconds while the computer does the maths
- Look at the results in the table below
Understanding the Numbers
After you calculate metrics, you'll see several important numbers for each project:
NPV (Net Present Value)
This tells you if a project will make or lose money. If the number is green and positive, the project will make money. If it's red and negative, the project will lose money.
IRR (Internal Rate of Return)
This is shown as a percentage. It tells you how much profit you're making compared to what you spent. Think of it like getting interest in a bank account - higher percentage means better returns!
Payback Period
This tells you how many years it will take to get your money back. If you spend £1000 on a project, the payback period shows when you'll have earned that £1000 back. Shorter is usually better!
The Graphs
The page also shows you two helpful graphs:
- Bar Chart: Shows which projects need the most money and which ones make the most profit
- Scatter Plot: Shows the risk vs reward - helping you spot which projects are safe winners and which ones are risky gambles
Portfolio Optimisation
What Does This Mean?
Imagine you have £10,000 to spend on projects, but there are 20 different projects you could choose from. Which ones should you pick to make the most money? That's what the optimisation tool helps you work out!
How to Use It
- Click the "Optimise Portfolio" button at the top of the page
- Enter your budget (how much money you have to spend)
- Choose what's most important to you (making money, being safe, or somewhere in between)
- Click "Run Optimisation"
- The computer will pick the best combination of projects for you!
Understanding the Results
After the optimisation runs, you'll see:
- Which projects the computer picked
- How much money you should spend on each one
- How much total profit you could make
- A pie chart showing how your budget is split up
Why Use This?
Instead of guessing which projects to choose, the computer uses clever maths to find the best combination. It's like having a really smart friend who's great at maths help you make decisions!
Risk Analysis
What is Risk?
Risk is the chance that something might go wrong with a project. Some projects are safe and predictable, whilst others are more like a gamble - they might be really successful or they might fail.
Risk Levels
The system shows risk in different colours:
- Green (Low Risk): Very safe, like putting money in a savings account
- Yellow (Medium Risk): Some uncertainty, but usually okay
- Orange (High Risk): Quite uncertain, things could go wrong
- Red (Very High Risk): Very uncertain, big gamble
Finding the Right Balance
The risk page helps you see if you have too many risky projects or too many safe ones. A good mix usually includes mostly safe projects with a few riskier ones that could have big rewards.
Editing Projects
Making Changes
On the Edit page, you can change details about your projects. This is useful when:
- A project's status changes (from planning to in progress, for example)
- You need to update how much a project costs
- You want to add a description to help remember what a project is about
- You need to fix a mistake in the project details
How to Edit
- Find the project you want to change using the search box
- Click the "Edit" button on that project
- Change the details you need to update
- Click "Save Changes" to keep your updates
- Or click "Cancel" if you change your mind
Important Information to Keep Updated
- Project Status: Keep this current so everyone knows what's happening
- Investment Amount: Make sure this matches what you're actually spending
- Dates: Update start and end dates if plans change
Building Your Own Portfolio
What's a Portfolio?
A portfolio is a collection of projects you've chosen to invest in. It's like building your own team of projects - you pick the ones you think will work well together and help you reach your goals.
Manual vs Automatic
There are two ways to build a portfolio:
- Portfolio Builder (Manual): You pick each project yourself, like choosing players for a sports team
- Optimisation (Automatic): The computer picks the best projects for you using maths
Creating a Portfolio
- Give your portfolio a name (like "Summer 2025 Projects")
- Set your total budget
- Click on projects to add them to your portfolio
- Decide how much money to give each project
- Check that your total spending doesn't go over your budget
- Click "Create Portfolio" to save it
Adding New Projects
When to Add a New Project
Add a new project when you have a new business idea that needs money. This could be anything from building a new website to buying new equipment.
Information You Need
Before adding a project, make sure you know:
- Project Name: What you're calling this project
- Description: What the project is about
- How Much It Costs: The total amount of money needed
- When It Starts and Ends: The timeline for the project
- How Risky It Is: Whether it's safe or uncertain
Adding the Project
- Click "New Project" button
- Fill in all the required information
- Double-check everything is correct
- Click "Create Project"
- Your new project will now appear in the system!
Helpful Tips
Getting Started
- Start by looking at the Dashboard to understand your overall situation
- Don't worry if you don't understand everything at first - it gets easier with practice!
- Try calculating metrics for just one or two projects first to see how it works
Making Good Decisions
- Look for projects with positive NPV (shown in green) - these make money
- Avoid projects with negative NPV (shown in red) - these lose money
- Don't put all your money in risky projects - spread it around
- Use the optimisation tool if you're not sure which projects to choose
Staying Organised
- Keep project information up to date, especially the status
- Recalculate metrics regularly (maybe once a month) to see how things are going
- Give your portfolios clear names so you remember what they're for
- Use the search box to quickly find specific projects
Understanding the Colours
Colour Guide
The system uses colours to help you understand things quickly:
Common Questions
What if I make a mistake?
Don't worry! You can always edit projects to fix mistakes. Just go to the Edit page, find the project, and update the information. Click Cancel if you change your mind whilst editing.
How often should I check the dashboard?
It's a good idea to check it regularly - maybe once a week or once a month. This helps you spot any problems early and make sure your projects are on track.
What if the numbers look wrong?
First, check that all the project information is correct on the Edit page. If something looks wrong, update it and then recalculate the metrics. If it still looks strange, ask for help from someone who knows about the project.
Should I always use optimisation or build portfolios manually?
Both are useful! Use optimisation when you want the computer to find the best combination automatically. Use manual building when you have specific projects you must include, or when you want more control over exactly which projects to choose.
What's the difference between a project and a portfolio?
A project is a single thing you're investing in (like building a website). A portfolio is a collection of several projects grouped together (like all your technology projects for this year).
Remember!
- Green numbers are good, red numbers are bad
- Higher NPV means more profit
- Lower risk is usually safer
- Keep your project information up to date
- Don't be afraid to experiment - you can always cancel or go back
- If you're unsure, ask for help!