Definition – What is the ROI (Return on Investment)?
Return on investment is the return on money invested. It is listed as a percentage.
Formula – How to calculate ROI
ROI = (Investment Gain / Investment Cost) x 100%
A company has an investment gain of $5,000 and investment cost of $10,000.
ROI = ($5,000 / $10,000) x 100% = 0.5000 x 100% = 50.00%
Therefore, this company has a 50% return on investment.