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What is return on investment (ROI)?
Return on investment (ROI) is a way to measure an investment's performance. It also can be used to compare different investments.
- ROI calculation applies to not just trading or investment, but any kind of business or purchase.
- Calculating an estimated ROI based on all your projected expenses and returns may help you make a better business decision.
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Closing thoughts
- The return on investment formula is a core part of tracking the performance of any portfolio, investment, or business.
- ROI isn't the ultimate metric, but it can be useful.
- You also need to consider opportunity cost, risk/reward ratio, and other factors that may have an impac...
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How to calculate return on investment (ROI)
The ROI formula is quite simple. You take the current value of the investment and subtract the original investment cost.
Then, you divide this sum by the original cost of the investment.
- ROI = (current value - original cost) /
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