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Topic: Miscellaneous
Number of pages / Number of words: 19 / 5138
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ROI is known as a profitability ratio, because it provides information about management's performance in using the resources of the small business to generate income.

A performance measure used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments...


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To calculate ROI, the benefit (return) of an investment is divided by the cost of the investment; the result is expressed as a percentage or a ratio.

Return on investment is a very popular metric because of its versatility and simplicity. That is, if an investment does not have a positive ROI, or if there are other opportunities with a higher ROI, then the investment should be not be undertaken...


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