what is meant by Financing/ROI?

1 ANSWERS

1. kate
   

   The Return on Investment is one of commonly used performance measure which is used in order to evaluate the efficiency of an investment or compare the efficiency of a number of different investments. If you want to calculate the ROI, and then divide the return on an investment by the cost of the investment, the answer is expressed in percentage or a ratio. Return on investment is a famous metric because it is versatile and easy to use. If an investment does not have a positive ROI or if there are alternative investment method with a higher ROI, the investment should not be availed.
   One should always remember that the ROI calculation can be change or modified according to the situation, depending on how an investment's returns and costs are calculated. In the clear sense, ROI is used to measure the profitability of an investment and there really is no specific calculation. For instance, a marketer may compare two different items or factors by dividing the revenue that each product has gaining through its costs. A financial analyst, however, may analyze the similar two products by using a completely different ROI calculation, perhaps by dividing the net income of an investment by the total value of all resources that have been employed to make and sell the product. As can be seen, this can create problems as ROI calculations can be manipulated to suit the user's requirements. In using ROI, one must have the knowledge about inputs that are being used.
   ROI= (gain from investment- cost of investment)/cost of investment
    

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