What is ROI?
ROI (Return on Investment) is an indicator used in business to determine the effectiveness and profitability of an investment. It represents the ratio of profits generated by an investment to its costs. This measure helps companies assess whether a given investment generates sufficient profits relative to the expenses incurred, which is crucial when making investment and marketing decisions.
How to calculate ROI?
ROI = (PROFIT FROM INVESTMENT – INVESTMENT COST) / INVESTMENT COST * 100%
Effective ROI management requires tracking and analyzing investment performance over time and adjusting strategies to maximize returns.
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