Description
Return on Investment (ROI) is a financial metric used to evaluate the profitability of an investment relative to its cost. It measures the gain or loss generated on an investment in relation to the initial amount invested. ROI is expressed as a percentage and calculated by dividing the net profit (or loss) from the investment by the initial investment cost and multiplying the result by 100. A positive ROI indicates a profitable investment, while a negative ROI signifies a loss. ROI is widely used by investors, businesses, and analysts to assess the effectiveness and efficiency of investments and to make informed decisions about allocating resources.