What is return on investment nedir?

Return on investment (ROI) is a financial metric that measures the profitability of an investment. It is calculated by dividing the net profit (gain from investment minus cost of investment) by the cost of investment. The result is expressed as a percentage or ratio.

ROI is a measure used to evaluate the efficiency of an investment or to compare the profitability of different investments. A higher ROI indicates a better return on investment, while a lower ROI suggests a lower return. The metric is commonly used by businesses and investors to make informed decisions about investing in various projects or ventures.

ROI is not a perfect measure of investment performance, as it does not account for factors such as time, risk, or opportunity cost. Additionally, it may not be the most appropriate metric for certain types of investments, such as those with non-monetary benefits or those with a long-term payback period. Nevertheless, ROI remains one of the most widely used measures of investment profitability in both business and finance.