Return on investment also abbreviated as ROI measures the net profit / loss generated from an investment. ROI helps an investor to make a good choice while investing in the company.
How To Calculate ROI?
The formula of ROI is
An investor was to purchase a stock for $500 and sell it at $600 after one year. Calculate the return on investment.
The return on investment in this case is $100 and it is positive hence,it is right to advice the investor to invest.