What is Return on Investment (ROI)?

What is Return on Investment (ROI)?

Return on Investment

A performance measure used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments. 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. For the avoidance of doubt, there is no such thing as ‘non-financial ROI’. If this phrase is invoked it may be to convey the importance of non-financial metrics and their vital role in business performance management.