Return on Investment (ROI)
ROI (Return on Investment) is a financial ratio that measures the return on investment in percentage terms and indicates the profit earned against the invested capital.
Return on Investment (ROI) is a financial ratio that measures the return on investment in percentage terms. ROI generally refers to the profit achieved against invested capital. This ratio is calculated by dividing the return on investment by its cost. That is, it is found by the formula (Profit - Investment Cost) / Investment Cost and is usually expressed as a percentage. ROI is used to evaluate the profitability of the investment. A high ROI means that the investment provides a higher return compared to its cost, while a low ROI may indicate that the expected return on the investment is low. Therefore, it is an important performance measure for investors and businesses.
