What is Return on Investment (ROI)?
Return on Investment (ROI) is a performance metric used to evaluate the efficiency of an investment or compare the efficiency of several different investments. It measures the amount of return on an investment relative to the investment’s cost.
In other words, ROI tells you how much money you can expect to make based on the total amount of money you invested. This can help investors decide whether a particular investment is worth pursuing or not.
The calculation for ROI involves dividing net profit by total investment and expressing it as a percentage. A positive ROI means that an investment is profitable, while a negative ROI indicates a loss.