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State Return on Investment or ROI

Return on Investment (ROI): It is a performance measure employed to calculate the efficiency of an investment or to compare the effectiveness of a number of various investments. To compute ROI, the advantage (return) of an investment is divided by the cost of investment; the outcome is stated as a percentage or a ratio.

The return on investment (ROI) formula is as:

ROI = (Gain from investment-cost of investment)/ (cost of investment)

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