ROI
In this article:
What is ROI?
ROI (Return on Investment) is a metric that measures the profitability of an investment. It indicates how much net profit an investment generates in relation to the cost incurred to make it.
ROI makes it possible to evaluate whether an action, campaign, or project has been profitable and to compare different investment efforts in order to make data-driven decisions.
How is ROI calculated?
ROI is calculated as follows:
- Subtract the cost of the investment from the revenue obtained to determine the net profit.
- Divide the net profit by the cost of the investment.
- Multiply the result by 100 to express it as a percentage.
Why is ROI important?
- It allows the effectiveness of an investment to be evaluated.
- It helps compare different projects or campaigns.
- It facilitates strategic decision-making based on measurable results.
- It helps justify spending to company stakeholders or decision-makers.
