ROI measures the profitability of an investment relative to its cost. It is calculated by dividing net profit by total investment and multiplying by 100. ROI helps businesses evaluate the effectiveness of marketing campaigns, projects, or financial decisions. A higher ROI indicates better performance. It is a universal metric used across industries. Companies use ROI to compare different investment opportunities and allocate resources efficiently.
| Aspect | Example |
|---|---|
| Marketing Investment | ₹20,000 |
| Sales Revenue Generated | ₹60,000 |
| Profit | ₹40,000 |
| ROI Calculation | (₹40,000 ÷ ₹20,000) × 100 |
| Result | 200% ROI |