How do you calculate ROI?

ROI or return on investment is a key metric used to evaluate the profitability and success of any investment. To calculate ROI, you need to divide the net profit generated by the investment by the cost of the investment. The net profit is calculated by subtracting the total costs associated with the investment, such as marketing or operating expenses from the revenue generated by the investment. The result is usually expressed as a percentage or a ratio, which provides valuable insights into the potential profitability, risks, and opportunities associated with the investment. It is important to note that ROI should be considered alongside other metrics such as payback period, cash flow, and risk analysis to provide a comprehensive overview of the investment performance.

This mind map was published on 19 April 2023 and has been viewed 113 times.