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To calculate Return on Investment (ROI), you can use the following formula:
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ROI = [(Net Profit / Initial Investment) x 100]
Here's a breakdown of the formula:
Net Profit: This is the amount of profit you've earned from your investment. It's calculated by subtracting your initial investment (cost) from your final earnings.
Initial Investment: This is the total cost of your investment, including any expenses or fees associated with it.
Multiply the ratio of Net Profit to Initial Investment by 100 to express the ROI as a percentage.
For example, if you invested $10,000 in a project and earned a net profit of $2,000, your ROI would be:
ROI = [($2,000 / $10,000) x 100] = 20%
So, in this case, your ROI is 20%, indicating that for every dollar you invested, you earned an additional 20 cents in profit.
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