Return on Investment (ROI)

Return on Investment is a financial metric that measures the profitability of an investment relative to its cost. ROI indicates how much revenue is generated for each unit of currency invested in a project or advertising campaign, helping businesses assess and optimize their investments for maximum profit.

Formula:

Example

If a company invested $10,000 in an ad campaign and earned $15,000 in revenue, the ROI would be calculated as:

ROI = [(15,000 − 10,000) / 10,000] × 100 = 50%.