Return on investment (ROI) is a financial metric used to evaluate the profitability or effectiveness of an investment. It measures the gain or loss generated from an investment relative to its cost. ROI is typically expressed as a percentage and is calculated by dividing the net profit or gain from the investment by the initial cost or investment amount, and then multiplying the result by 100. A higher ROI indicates a more favorable return compared to the investment's cost, while a negative ROI implies a loss. ROI is often used by investors, businesses, and financial analysts to assess the potential profitability and compare the performance of different investments.
