Return on Investment (ROI)

Return on investment (ROI) is a financial measure that assesses the profitability of an investment or action by comparing the gains generated to the costs incurred. It is usually expressed as a percentage and is calculated by dividing the net profit by the total cost of the investment. ROI allows businesses to determine the effectiveness of their spending, whether it's marketing actions, new projects, or any other investment. A positive ROI indicates that the gains outweigh the costs, while a negative ROI means losses.