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ROI (Return of Investment)

Standing for “Return of Investment”, an ROI is simply the ratio between the net profit and the investment cost.

The ROI is a financial metric that is used by the investing and business world to measure the probability of gathering returns from an investment made. In this metric, gain and loss is compared relative to the actual costs doled out by the investor. The ROI serves the cause of assessing the potential return from a singular investment with consideration to returns from other investments. 

The ROI is one of the key measuring tools in finding out the viability of a number of different alternatives to investments. 

While technically a ratio, the ROI is usually written as a percentage rather than a ratio.

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