Enter purchase price (or build cost), monthly gross revenue, monthly operating expenses, financing terms (down payment, interest rate, term), and your assumed annual rent escalator. The calculator returns 10-year IRR, NPV, simple payback period, cash-on-cash return, and DSCR (debt service coverage ratio). Every output is shown with the math behind it — no black box. Built for operators who need a real number to take to a lender or partner.
The Math Under the Hood
Cash flow model uses straight-line equipment depreciation over 10 years (per IRS Section 179 typical use), tax-adjusted NOI, and an exit multiple of 3.5x trailing SDE in year 10. IRR is calculated using Newton-Raphson method on annual cash flows including the exit. DSCR uses NOI divided by annual debt service — most SBA 7a lenders require 1.25x minimum, the calculator flags below 1.25x in red.
Sensitivity Analysis
After your base run, the calculator shows how IRR shifts with ±10% revenue, ±10% expenses, and ±100bp interest rate moves. This is the single most important output for stress-testing a deal — most first-time buyers project a single-point estimate and miss the downside risk. Members can save and share scenarios with their lender or business partner.
Frequently Asked Questions
Is this calculator free?
Yes — completely free, no signup required. Save scenarios, export to PDF, or share a link with a lender by signing in with a free WashBizHub account.
How does this differ from the Valuation Calculator?
The Valuation Calculator estimates what an existing store is worth today (SDE multiple). The ROI Calculator projects what a deal will return over 10 years given your specific purchase terms and operating assumptions. Most buyers run both — value first, then ROI to confirm the deal pencils.
Can I use this for a new build?
Yes. Use total build cost (equipment + tenant improvements + working capital) as your purchase price input. Use realistic ramp-up assumptions for revenue (typically 30/60/100% of mature revenue across months 1–6, then full revenue thereafter). The calculator handles ramp scenarios in Advanced mode.