Return on Investment - ROI
Return on Investment is a ratio that measures efficiency of invested capital.
Return on Investment is calculated by dividing the difference between gains from investment and costs of investments by costs of investments.
ROI is expressed as a percentage and can be used to compare benefits of a number of different investments, benefit of one particular investment or benefit the company as a whole is experiencing.
ROI is very simple and popular ratio, which can easy show you what investment is experiencing positive returns, and deserves to be invested in. It is so simple because if there is a low ROI in some investment, or if there are other investments with higher ROI, you should think about them instead.
It is crucial to focus on inputs you need to include in the equation, depending on the results you are seeking.
| Related Terms: |