ROI

(noun)

The return on investment (ROI) is the ratio of money gained or lost (whether realized or unrealized) on an investment relative to the amount of money invested.

Related Terms

Examples of ROI in the following topics:

  • Calculating and Understanding Average Returns

    • Average returns are commonly found using average ROI, CAGR, or IRR.
    • To calculate the total ROI of an investment, simply divide the total dollar returns of the investment by the initial value.
    • The average ROI is the arithmetic average: divide the total ROI by the number of periods.
    • If the purchase of a stock led to an ROI of 15% over 5 years, the average ROI is 3% per year.
    • CAGR, unlike average ROI, does consider compounding returns.

  • Return on Investment

    • Return on investment (ROI) is one way of considering profits in relation to capital invested.
    • Return on investment (ROI) is one way of considering profits in relation to capital invested.
    • ROI is often compared to expected (or required) rates of return on dollars invested.
    • Complications in calculating ROI can occur when a real estate property is refinanced, or a second mortgage is taken out.
    • Both of these factors can reduce the ROI when the new numbers are used in the ROI equation.

  • Payback, ROI and renewable energy

    • The long-term financial rewards of renewable energy cannot be understood without comprehending ‘payback' or return-on-investment (ROI), both of which measure profitability in relation to capital expenses.
    • To determine payback or ROI… Imagine that a factory pays €10,000 annually to purchase electricity from a coal-burning power plant – and that the cost of equipment (wind turbines or solar voltaics) that can transform sunlight or wind into the same amount of electricity is €50,000.
    • Note that accountants typically like to see financial investment estimates in terms of ROI, while almost everyone else prefers to see the ‘payback' period of an investment in terms of months or years.

  • Return on Investment

    • One of the most common pricing objectives is obtaining a target rate of return on investment (ROI).
    • Explain why pricing objectives focus on delivering a return on investment (ROI)

  • Percentage Returns

    • This type of return is also called the return on investment (ROI), where the numerator is the dollar return.
    • In , the ROI is calculated for each individual year by dividing the dollar return by the initial value of $1,000.
    • The ROI can be annualized by dividing by the number of years between the purchase and sale of the security.
    • The ROI is the percentage return, and is calculated by dividing the dollar return by the initial value of the investment ($1,000).

  • Jackie Robinson

    • In Boys of Summer, Roger Kahn describes the Dodgers during these years, including Roy Campanella, Carl Furillo, Gil Hodges, Pee Wee Reese, and Duke Snider.
    • The Dodgers succeeded well with such black stars as Jackie Robinson, Roy Campanella, and Don Newcombe.

  • Pop Art

    • Of equal importance to American Pop Art is Roy Lichtenstein.

  • Decision-Making Units

    • If a product poses challenges at the installation phase, then the infrastructure buyer and/or DMU steps in to decide whether the return on investment (ROI) is worth the time and money required to set up the infrastructure.

  • Methods for Evaluating Marketing Performance

    • Marketing Performance Measurement, Marketing Performance Management, Marketing Return on Investment (ROI), Return on Marketing Investment (ROMI), and Accountable Marketing are all metrics that companies use to connect marketing performance to the financial performance of the organization.

  • Confederate Politics

    • Back row, standing left to right: Christopher Memminger and LeRoy Pope Walker.