Return On Investment (ROI)

Return on investment, or ROI, is the result expressed in a percentage compared to the capital invested. For example, if $1,000 invested in a marketing campaign resulted in $10,000 of sales, then the return on investment, or ROI, is 900% (i.e., ($10,000-$1,000) / $1,000).

In term of equity investment, if you invested $1,000 in a stock and at the end of the year it’s worth $1,100, then the return on investment is 10% (i.e., ($1,100-$1,000) / $1,000).