What is Return on Investment?

A definition of Return on Investment

“Return on Investment (ROI) is a financial metric used to evaluate the profitability of an investment, calculated by dividing the net profit by the initial cost of the investment, expressed as a percentage.”

Return on Investment in Business Glossary - What is Return on Investment?

Business Glossary > What is Return on Investment?


Examples of Return on Investment in a Sentence:

Calculating return on investment is essential for assessing project feasibility.

The company’s ROI improved significantly after the new marketing campaign.

Investors seek a high return on investment before committing their funds.

Why is Return on Investment Important in Business?

Understanding Return on Investment is crucial for businesses to determine the financial viability of their expenditures. It helps in measuring the efficiency of investments, guiding strategic decisions, and improving allocation of resources.

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Associated Terms

Here are some associated business terms and synonyms for “Return on Investment”:

  • ROI
  • Gain from Investment
  • Investment Return

Apple’s Return on Investment

Apple’s return on investment has consistently been high due to its strong brand, innovative products, and effective market strategies. Their ability to innovate and capture market share results in significant profits, yielding attractive returns for its shareholders.

Final Notes on Return on Investment

When evaluating an investment, consider its potential ROI in relation to other opportunities. Adjust for risk factors and economic conditions to make a well-informed decision about future profitability.


This has been a definition of Return on Investment meaning.

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