A spreadsheet program, commonly Microsoft Excel, can be utilized to create templates designed for return on investment (ROI) calculations. These templates typically involve inputting various financial metrics, such as investment costs, returns, and time periods, enabling automated calculation and analysis of profitability. An example would be a business using a spreadsheet to project the ROI of a new marketing campaign by entering projected costs and estimated revenue increases.
Using spreadsheets for this purpose provides several advantages, including customizability, the ability to perform sensitivity analysis by adjusting variables, and straightforward sharing and collaboration. This approach offers a readily accessible and cost-effective way to assess investment viability. Prior to widespread digital tools, manual calculations were prevalent, making these automated templates a significant advancement in financial analysis.