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  1. #1
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    What is the formula of ROI?

    Hello Friends,

    What is the formula of ROI?

  2. #2
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    The basic formula for ROI is ROI = Net Profit / Total Investment * 100. Keep in mind that if you have a net loss on your investment, the ROI will be negative. Shareholders can evaluate the ROI of their stock holding by using this formula: ROI = (Net Income + (Current Value - Original Value)) / Original Value * 100.

  3. #3
    Registered User handmaderug's Avatar
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    Hi Friends,

    Return on Investment, usually abbreviated as ROI, is a common, widespread metric used to evaluate the forecasted profitability on different investments.

    ROI maybe confused with ROR, or rate of return. Sometime, they can be used interchangeably, but there is a big difference: ROR can denote a period of time, often annually, while ROI doesn't.

    The basic formula for ROI is:

    ROI = Gain from Investment - Cost of Investment / Cost of Investment

  4. #4
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    The ROI is calculated by dividing the net return on investment by the cost of investment and multiplying by 100% or by subtracting the initial value of the investment from the final value of the investment, dividing this new number by the cost of the investment and multiplying it by 100%.

  5. #5
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    Formula. Department's net operating income (also called segment margin) equals the department's revenue minus all controllable expenses.
    Example. CP Inc. is a company engaged in production and distribution of computers and printers. ...
    Disadvantage of ROI. ROI suffers from a serious drawback when used in performance evaluation. ...

  6. #6
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    What is the formula of ROI?

  7. #7

  8. #8
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    The basic formula for ROI is: ROI = Net Profit / Total Investment * 100. Keep in mind that if you have a net loss on your investment, the ROI will be negative. Shareholders can evaluate the ROI of their stock holding by using this formula: ROI = (Net Income + (Current Value - Original Value)) / Original Value * 100

  9. #9
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    The basic formula for ROI is: ROI = Net Profit / Total Investment * 100. Keep in mind that if you have a net loss on your investment, the ROI will be negative. Shareholders can evaluate the ROI of their stock holding by using this formula: ROI = (Net Income + (Current Value - Original Value)) / Original Value * 100.

  10. #10
    Quote Originally Posted by rickylarson View Post
    The basic formula for ROI is ROI = Net Profit / Total Investment * 100. Keep in mind that if you have a net loss on your investment, the ROI will be negative. Shareholders can evaluate the ROI of their stock holding by using this formula: ROI = (Net Income + (Current Value - Original Value)) / Original Value * 100.
    Thanks for your exact answer.

  11. #11
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    Quote Originally Posted by rickylarson View Post
    The basic formula for ROI is ROI = Net Profit / Total Investment * 100. Keep in mind that if you have a net loss on your investment, the ROI will be negative. Shareholders can evaluate the ROI of their stock holding by using this formula: ROI = (Net Income + (Current Value - Original Value)) / Original Value * 100.
    Thanks for this information. I have never understood what exactly means ROI. I was looking for some more information that I'll need in my new journey. I would like to make an investment in a small business. I hope that this will work 'cause I really don't want to go more to work. I inspired myself thanks to one of my friends that shared this blog https://themoneymix.com. There I read everything about the investment, ok at least the basic knowledge, and found some ideas. So I want to develop one of them. Thanks again!
    Last edited by chrisbarett; 07-21-2020 at 05:30 AM.

  12. #12
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    ROI is calculated by subtracting the initial value of the investment from the final value of the investment (which equals the net return), then dividing this new number (the net return) by the cost of the investment, and, finally, multiplying it by 100

  13. #13
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    Quote Originally Posted by varunindia88 View Post
    Hello Friends,

    What is the formula of ROI?
    The ROI formula looks at the benefit received from an investment, or its gain, divided by the investment's original cost. "Return on investment" is a financial calculation used to gauge how well the money you invest earns you even more money.

  14. #14
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    ROI is calculated by subtracting the initial value of the investment from the final value of the investment (which equals the net return), then dividing this new number (the net return) by the cost of the investment, and, finally, multiplying it by 100.

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  15. #15
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    The higher the ROI, the better a return you're getting. I usually do plenty of research beyond ROI to determine if my investment could potentially become more profitable, or whether now is the time to sell it, so don't limit yourself only on that formula. Now, I'm involved in 1031 exchange investments and use this formula regularly because I constantly calculate my benefits received from my investments. There are plenty of other formulas you should consider if you want to understand if the money you invest brings you even more money, so don't limit only on this one.
    Last edited by JamesRoss; 09-11-2020 at 02:42 PM.

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