Return on Investment (ROI)

Return on investment (ROI) is a metric used to assess an investment’s performance and profitability by comparing its current value to its initial cost. ROI is frequently expressed as a percentage and is calculated as follows: ROI = (Current Value of Investment – Cost of Investment) / Cost of Investment. For example, if you invested $100 and it grew to be worth $140, the ROI would be calculated by dividing the net profits ($140 – $100 = $40) by the cost of investment ($100), yielding an ROI of $40/$100, or 40%.