Return on Investment (ROI) - Definition & Calculation

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Return on Investment (ROI): As the name suggests, Return on Investment means the monetary benefit earned on an investment. One may consider it as profits in percentage term on capital invested.

Formula: Net Income / Average owners equity or
                       Net Income / Invested capital

Implication: Every individual invest any amount or sum with the anticipation of earning some return on it.  This metric can be used for future investment as well as can also be used for calculating the past performance, for taking decisions.
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3 comments:

  1. Mobile App DevelopersMonday, October 26, 2015

    Very informative, keep posting such good articles, it really helps to know about things.

    ReplyDelete
  2. GST Registration in DelhiFriday, January 06, 2017

    I am extremely impressed along with your writing abilities, Thanks for this great share.

    ReplyDelete
  3. UnknownThursday, August 23, 2018

    Today's everyone wants a high return on investments but it is not easy. For getting high ROI, you need to make the best financial planning for your investments. Your article is very helpful for calculation of ROI. If you are interested to know more about Financial Services Melbourne, visit unhiddenfigures.com.au

    ReplyDelete

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