Shahid Maqbool

By Shahid Maqbool
On Jun 26, 2023


What is ROI?

ROI (Return on Investment) is a metric used to measure the profitability of an investment by calculating the return or gain generated from an investment compared to the initial investment amount.

The formula for calculating ROI is:

ROI = (Net Profit / Cost of Investment) x 100

Let's say you invest $1,000 in an online advertising campaign, and as a result, you generate $3,000 in sales.

Using the ROI formula: ROI = (($3,000 - $1,000) / $1,000) x 100 ROI = 200%

The ROI is 200% - indicating that for every dollar invested in the advertising campaign, there was a return of $2. This implies that the campaign was profitable, with a positive ROI.

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