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RFinance glossary

Return on Investment (ROI)

Quick definition

A measure of gain relative to investment.

Overview

Return on investment (ROI) is a measure used to evaluate the efficiency of an investment by comparing the profit earned with the cost incurred.

Common uses

Investment decisions
Project evaluation
Marketing strategies

Examples of use in small businesses

Analysing advertising campaigns
Evaluating the effectiveness of new products
Optimising resource investments

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