How to Calculate Return on Investment (ROI)

Basic formula for calculating ROI as a percentage.

Return on investment (ROI) is the ratio of money earned or lost on an investment relative to the amount of money invested.  ROI is typically expressed as a percentage rather than a decimal value, and is based on returns over a period of time (most often stated for one calendar or fiscal year).

Here's the basic calculation for determing Return on Investment (ROI):

ROI = (Revenue - Costs) / Costs

To get the ROI as a Percentage, multiple by 100:

ROI = [(Revenue - Costs) / Costs] * 100 

As an example, lets say "Company A1" earns $1,000 in revenue, and has costs of $750.  Company A1's return on investment would be 33.3%.



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