ROI

ROI (Return on Investment) (Definition)

ROI is a performance measure used to evaluate the efficiency or profitability of an investment or compare the efficiency of a number of different investments.

Key aspects of ROI include:

1. Calculated as (Net Profit / Cost of Investment) * 100
2. Expressed as a percentage or a ratio
3. Used to compare the profitability of different investments or projects
4. Higher ROI indicates a more efficient or profitable investment
5. Does not account for the time value of money or risk factors
6. Can be applied to various types of investments, from stocks to business projects
7. Understanding ROI is crucial for making informed investment decisions and evaluating business performance

While ROI is a valuable metric, it should be used in conjunction with other financial measures for comprehensive analysis.