Return on investment (ROI)

Return on investment (ROI) is a performance metric, typically expressed as a percentage, that measures the profitability of an investment by comparing the net profit generated to the initial cost.

The formula to calculate Return on investment (ROI) is:

ROI = (Net Profit / Cost of Investment) × 100

Where:

• Net profit is the gain from the investment (Revenue - Cost).
• The cost of investment is the total amount invested.

Return on Investment (ROI) helps businesses assess their investments’ efficiency and financial return.

A good ROI varies by industry and investment type, but generally, a higher ROI indicates a more profitable investment.