Definition of ROI

The acronym ROI stands for return on investment. This business term refers to the measurement of revenue or profit that a company generates from a specific investment or several investments that have been grouped together. Website owners can calculate the ROI on their investments using marketing programs to promote their websites.

Calculating the ROI involves determining the gain from the investment and the cost of the investment. The gain or benefit from the investment less the cost of the investment is divided by the total cost of the investment, resulting in a number that is expressed as a ratio or percentage. This is the ROI (ROI= financial benefit from the investment - cost of the investment/ cost of the investment.) A positive answer or number indicates that the investment has been profitable for the company or business. On the other hand, a negative ROI indicates that the venture has not been profitable.

External links:

• wikipedia explanation of ROI
• Investopedia definition of ROI
• SearchCIO.com Definitions
• wikipedia explanation of ROI