ROI

What is ROI?

Return on Investment or ROI is a common metric used to measure the profitability of an investment.

Investors usually use this to calculate the gain generated from an investment. This helps them understand how well a campaign or a model performed.

It is done by using a specific formula:

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

Let's suppose you have invested $1,000 in an ad campaign and generated $3,000 in sales.

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

Here the ROI is 200%. It shows that for every dollar invested, there was a return of $2. This indicates that the campaign had a positive ROI.

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