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ROI
/ɑːr oʊ aɪ/
profitability ratio
The company's ROI on the new marketing campaign was 25%.
The campaign generated a quarter return for every dollar invested.
Finance
technical
A measure of the profitability of an investment, calculated as the ratio of net profit to the cost of the investment.
Investors use ROI to compare the efficiency of different investments.
ROI helps determine which investments yield the highest returns.
The ROI for the project was calculated at 15%, indicating a profitable venture.
A 15% ROI means the project returned $15 for every $100 invested.
ROI is often expressed as a percentage. Higher ROI indicates better investment performance.
Business
formal
Return on investment; the financial gain or loss generated on an investment relative to the amount invested.
We need to evaluate the ROI of expanding into new markets.
Assessing potential returns is crucial before entering new markets.
ROI can be used to assess past performance or predict future outcomes.
Collocations
high ROIinvestment with significant returnslow ROIinvestment with minimal or negative returnscalculate ROIdetermine the profitability of an investmentROI analysisassessment of investment profitability
Antonyms
Related Phrases
Pro Tip
Calculate ROI accurately
Include all costs (direct and indirect) and all gains (immediate and long-term) when computing ROI. For example, don't forget to account for opportunity costs or hidden expenses.
Gold Rule
ROI vs. time horizon
ROI does not account for the time value of money. For long-term investments, consider using metrics like Net Present Value (NPV) or Internal Rate of Return (IRR) instead.
Word Origin
Acronym formed from the first letters of 'Return On Investment'. The term originated in the early 20th century in financial accounting and investment analysis contexts.
Usage Notes
ROI is widely used across finance, business, and marketing to evaluate the efficiency of investments. It is a key metric for investors, managers, and stakeholders. Always ensure the time frame and costs are clearly defined when calculating ROI.
Word Breakdown
R
Return
acronymO
On
acronymI
Investment
acronymEnglish Dictionary