Return on Investment (ROI)

Return on investment (ROI) is a performance metric used to assess 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.

Calculating ROI

ROI can be calculated in two ways

  1. ROI = Net Return on Investment/Cost of Investment x 100%
  2. ROI = (Final Value of Investment – Initial Value of Investment)/Cost of Investment x 100%

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