| ROI |
| Return on Investment |
Return on investment (ROI) is a financial metric that measures the net gain or loss on an investment, expressed as a percentage of the total cost of the investment. |
| ROI is a useful metric for evaluating the effectiveness of an investment, as it allows organizations to compare the returns on different investments and determine which ones are the most profitable. It is often used to evaluate the performance of investments in marketing campaigns, new product development, and other business initiatives. |
How to Calculate: |
It is calculated by dividing the Total Return (TR) on the investment by the Total Cost (TC) of the investment, and multiplying the result by 100 to express it as a percentage. |
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| For example, if an organization invests $100 in a marketing campaign and generates $120 in revenue as a result, its ROI would be 20%. This means that for every dollar invested in the campaign, the organization received $0.20 in return. |