Return on Investment (ROI)
Return on Investment (ROI) is a financial metric used to evaluate the efficiency of an investment. It measures the return generated relative to the cost of the investment. ROI is calculated by subtracting the initial investment cost from the final value, then dividing that by the initial cost, and expressing it as a percentage. For example, if you invest $100 and earn $120, your ROI would be 20% (i.e., ($120 - $100) / $100 = 0.20). Higher ROI indicates a more profitable investment, helping investors assess where to allocate their resources effectively.
Additional Insights
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Return on Investment (ROI) is a financial metric used to evaluate the efficiency of an investment. It measures the gain or loss generated relative to the amount invested. Typically expressed as a percentage, ROI is calculated by subtracting the initial investment cost from the final value, then dividing that figure by the initial cost and multiplying by 100. A positive ROI indicates that the investment has made money, while a negative ROI shows a loss. It's a useful tool for comparing the profitability of different investments or business projects.
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Return on Investment (ROI) is a measure used to evaluate the efficiency or profitability of an investment. It is calculated by taking the gain from the investment, subtracting the cost of the investment, and then dividing that number by the cost of the investment. The result is often expressed as a percentage. A higher ROI indicates that the investment has generated more profit relative to its cost, while a lower ROI suggests less efficiency. Essentially, ROI helps investors determine how well their money is working for them compared to other potential investments.