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Return on Investment

Return on Investment or ROI is a metric which describes the efficiency of a particular investment. ROI’s purpose is to measure the profitability and the amount of the return of an investment in relation to that investment’s costs.

You can compute ROI using the below formula:

Return on Investment = (Gain from Investment - Cost of Investment)/Cost of Investment

Return on Investment helps companies assess whether a particular effort was worth the investment and whether to put more budget into it.

You can measure ROI in regards to many ventures ranging from Google Ads and finishing on investing into the newly emerged startup.

Glossary terms starting with the same letter

r
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