ROI — Meaning and details

Return on Investment

Return on Investment is a performance measure used to evaluate the efficiency or profitability of an investment or compare the efficiency of a number of different investments. ROI tries to directly measure the amount of return on a particular investment, relative to the investment’s cost.

ROI is calculated by taking the gain from an investment, subtracting the cost of the investment, and dividing the total by the cost of the investment. Or, ROI = (Net Profit / Cost of Investment) x 100.