ROI is a performance metric used to evaluate the financial efficiency of an investment, or to compare the relative efficiency of multiple investments. It measures an investment’s gain or loss relative to the initial investment. ROI is calculated as follows:
ROI = (earnings – cost of investment) / cost of investment * 100%
While ROI is often associated with purely financial investments – such as the purchase of stock shares or an investment in a mutual fund – ROI figures can be calculated for nearly any activity into which an investment has been made and an outcome can be measured. The outcome of a ROI calculation will vary depending on which figures are included as earnings and costs. The longer an investment horizon, the more challenging it may be to accurately project or determine earnings and costs and other factors such as the rate of inflation or the tax rate. It can also be difficult to make accurate estimates when measuring the monetary value of the results and costs for projectbased programs or processes (for example, calculating the ROI for a Human Resources department within an organization) or other activities which may be difficult to quantify in the nearterm and especially so in the longterm as the activity or program evolves and factors change. Because of these challenges, ROI can be less meaningful for longterm investments.

How can return on investment (ROI) calculations be manipulated?
Check out an example of how the return on investment (ROI) for similar investments can vary greatly, depending on how the ... Read Answer >> 
How do you calculate return on investment (ROI)?
Find out how to calculate return on investment, or ROI, for your portfolio, and learn why it is considered so valuable in ... Read Answer >> 
What is the difference between ROCE and ROI?
Understand the difference between return on capital employed and return on investment and how analysts use these performance ... Read Answer >> 
What is the formula for calculating return on investment (ROI) in Excel?
Find out more about return on investment (ROI) and the formula used for calculating return on investment for a company in ... Read Answer >> 
How do managers measure human capital?
Learn what human capital is, how managers measure it and how managers measure human capital's return on investment to gauge ... Read Answer >> 
How does JIT (just in time) production affect ROI (return on investment)?
Learn about the "just in time" production strategy and how this ondemand system affects return on investment by reducing ... Read Answer >>

Investing
FYI On ROI: A Guide To Calculating Return On Investment
Return on investment is a simple equation that can give you an edge when finetuning your portfolio  here's how to use it. 
Managing Wealth
How to Calculate ROI For Real Estate Investments
When it comes to real estate investments, there are two important ROI calculations to know. 
Managing Wealth
Figuring What You Make On Rental Property (ROI)
The return on investment can vary greatly, depending on how much of the building you own. 
Personal Finance
How To Calculate ROI For Real Estate Investments
Calculating return on real estate investments can be difficult. We help you figure it out. 
Managing Wealth
How To Calculate ROI Of A Marketing Campaign
To make the most of your marketing spend, you need to know how to measure its results. 
Personal Finance
College Tuition vs. Investing: Is It Worth It?
With the rising cost of college and questionable career prospects awaiting college graduates, some are wondering if a college education is still worth it. 
Managing Wealth
8 College Degrees with the Best Returns on Investment
Find out which college degrees offer the best opportunities to earn a salary that can generate a solid return on your investment in education. 
Markets
3 Ways To Evaluate the Performance of Alternatives
Learn about three ways to measure the performance of alternative investments. See how the commonly used Sharpe ratio has drawbacks in measuring volatility. 
Investing
Return on Investment (ROI) Vs. Internal Rate of Return (IRR)
Read about the similarities and differences between an investment's internal rate of return (IRR) and its return on investment (ROI). 
Personal Finance
Where You Get the Most/Least for Your State Taxes
Are you deriving the greatest benefits from your tax dollars? A recent survey from WalletHub may indicate otherwise.

Return On Investment  ROI
A performance measure used to evaluate the efficiency of an investment ... 
Investment Center
A business unit that can utilize capital to directly contribute ... 
Return
The gain or loss of a security in a particular period. The return ... 
Investing
The act of committing money or capital to an endeavor with the ... 
LongTerm Investments
An account on the asset side of a company's balance sheet that ... 
CashOnCash Return
A rate of return often used in real estate transactions. The ...