Calculating ROI

ROI Fact: Determining the return on investment on capital equipment like flatbed presses is a straight-forward calculation of the total revenue divided by the total costs over the expected lifetime of the press. The equation is as follows:

ROI = Total Revenue/Total Cost x 100%

Total Revenue is defined as the anticipated sum of gross invoicing off the equipment over a specified period of time (typically two to five years on digital flatbed presses).

Total Cost is the anticipated sum of all overhead, depreciation, operating and consumable cost to produce the sellable output off the equipment over the same period of time as used in the total revenue calculation.

The key to calculating an accurate ROI is to have as full an understanding of the operating costs as possible. This means you must have an in-depth understanding of the following:

• The real throughput/output capability of the equipment
• The actual operating cost of the equipment
• The applied cost of ink and consumables
• Residual value of the equipment
• Understanding your current business plans and growth assumptions