Next video:
Loading the player...

Return on investment allows an investor to evaluate the performance of an investment and compare it to others in his or her portfolio. Find out how to calculate ROI and how to use to your advantage.

Related Articles
  1. 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 fine-tuning your portfolio - here's how to use it.
  2. 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.
  3. Investing

    How To Calculate ROI For Real Estate Investments

    Calculating return on real estate investments can be difficult. We help you figure it out.
  4. Small Business

    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.
  5. 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.
  6. Investing

    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.
  7. Tech

    How to Increase ROI with Financial Planning Software

    Here are five strategies to increase ROI via financial planning software in the wake of the fiduciary rule.
  8. Investing

    5 Stock Market Metrics Explained

    Learn how to evaluate a company's performance using metrics such as ROE, EPS and P/E ratio.
  9. 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).
  10. Managing Wealth

    Which MBAs Offer A Good Return On Investment?

    There are a lot of factors to consider when selecting a school for your MBA, not the least is when you will see a return on your investment.
Hot Definitions
  1. Book Value

    1. The value at which an asset is carried on a balance sheet. To calculate, take the cost of an asset minus the accumulated ...
  2. Dividend Yield

    A financial ratio that shows how much a company pays out in dividends each year relative to its share price.
  3. Fixed-Income Security

    An investment that provides a return in the form of fixed periodic payments and the eventual return of principal at maturity. ...
  4. Free Cash Flow - FCF

    A measure of financial performance calculated as operating cash flow minus capital expenditures. Free cash flow (FCF) represents ...
  5. Leverage Ratio

    Any ratio used to calculate the financial leverage of a company to get an idea of the company's methods of financing or to ...
  6. Two And Twenty

    A type of compensation structure that hedge fund managers typically employ in which part of compensation is performance based. ...
Trading Center