rə.ˈtɝːn ˈɑːn ˌin.ˈvest.mənt / Return-On-Investment (ROI)


Return-on-investment (ROI) is a measurement of profitability.

Generally, businesses use ROI in two ways: to evaluate the performance of an investment or to compare the returns of different investments.

Not to be confused with profit, return-on-investment focuses on two factors: the money invested in a company and the returns generated from that investment. The company's net profit serves as the basis for the latter. On the other hand, profit is the measurement of a company's performance.

Expressed as either a percentage or a ratio, ROI can be determined by subtracting the cost of investment from the value of investment before dividing by the cost of investment:

ROI = (investment value - investment cost) / investment cost

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