return on investment
/ˈrɛtɜːn ɒn ɪnˈvɛstmənt/noun phrase★Intermediate
💰Finance
formal
The financial gain or profit generated from an investment relative to the amount invested.
Real estate often provides a steady return on investment over time.
Investing in property typically yields consistent profits.
Stocks with high returns on investment also carry higher risks.
Higher profits from stocks usually come with greater uncertainty.
💡
ROI is commonly expressed as a percentage or ratio.
Collocations
calculate return on investmentto determine the profit from an investmentmaximize return on investmentto increase the profit from an investment
Synonyms
Antonyms
Related Phrases
cost-benefit analysisphrase
a method to compare costs and benefits of an investment
net present valuephrase
the current value of future cash flows
💡Pro Tip
Understanding ROI
ROI helps investors decide whether an investment is worth the risk.
⚡Gold Rule
Accurate Calculation
Always use consistent time periods and include all costs when calculating ROI.
📖Word Origin
Derived from financial terminology, combining 'return' (profit) and 'investment' (capital put into an asset).
📝Usage Notes
ROI is a key metric in finance and business to evaluate the efficiency of investments.
Word Breakdown
return
profit or gain
rooton
relative to
prepositioninvestment
money or resources put into an asset
rootEnglish Dictionary