Just because it says “Return on Investment,” doesn’t mean it’s the profit! Remember that.
ROI is the percentage you gained after investing capital (money and other forms) in a profit-driven venture.
For example, you invested $500 in a pizza business. By the end of the month, your total sales are $800. Your profit is $300. To convert it into percentage: ($300/$500) x 100 = 60%. Your ROI is 60%.
The result in percentage is preferred because it would be easier to compare it with other ROIs in different situations.
Other interesting terms…
