Return on investment
Fast track (Summarised definition)
Financial metric measuring gain or loss generated from investment relative to investment cost, essential for evaluating business decisions, comparing opportunities, and assessing overall financial performance across business activities.
Full lap (Full definition)
Return on investment, commonly abbreviated as ROI, represents financial metrics that measure gain or loss generated from investments relative to investment costs, serving as essential indicator for evaluating business decisions, comparing opportunities, and assessing overall financial performance across business activities.
The importance of ROI extends beyond investment measurement to encompass strategic planning, resource allocation, and business performance evaluation. ROI calculation enables businesses to compare investment opportunities whilst making informed decisions and supporting strategic planning through systematic investment assessment and financial performance measurement.
ROI calculation involves dividing investment gains by investment costs, providing standardised measurement whilst enabling investment comparison and strategic decision-making across different business opportunities, projects, and time periods for comprehensive financial evaluation.
ROI applications encompass investment evaluation, project assessment, business planning, and performance measurement that require financial analysis whilst supporting strategic decision-making and resource allocation across diverse business investments and operational initiatives.
ROI benefits include improved decision-making, enhanced resource allocation, better investment comparison, and strategic planning support that enable effective business management whilst providing clear financial measurement and supporting business objectives through informed investment decisions.
ROI analysis involves investment tracking, performance measurement, comparison assessment, and strategic evaluation that ensure effective investment management whilst maintaining financial accountability and supporting business objectives through systematic investment assessment and performance evaluation.
For businesses making investment decisions and evaluating financial performance, ROI provides essential metric for investment assessment and strategic planning. Strategic ROI utilisation enables improved investment decisions, enhanced resource allocation, and competitive advantage through systematic financial evaluation that supports business objectives whilst ensuring profitable investment strategies and effective resource management.