Return on investment
Glossary term
Author:
Fluent Commerce
Changed on:
30 Apr 2024
Definition
Return on Investment (ROI) is a financial metric commonly used to measure the likelihood of gaining a return from an investment. It is a ratio that compares the gain or loss from an investment relative to its cost. The formula to calculate ROI is:
ROI = (Net Profit / Cost of Investment) x 100
Essentially, ROI allows investors and business owners to assess an investment's efficiency or compare the efficiencies of several different investments. A higher ROI indicates that the investment gains compare favorably to the investment cost.
| Acronyms | ROI |
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