Return on investment


Return on investment, or ROI, is a common business term that refers to past and future financial returns. The return on investment (ROI) of a project or venture is important to managers and executives since it reflects how successful a venture will be.

ROI is different from profit. The ROI refers to the amount of money you put into a company and the amount of money you get back, depending on the company's net profit. On the other hand, profit is a metric used to assess a company's performance.

There are several ways to calculate ROI. The most common is net income divided by the total cost of the investment or ROI = Net income / Cost of investment x 100.