Return-on-Investment (ROI) Measure

A Return-on-Investment (ROI) Measure is a microeconomic measure based on a ratio between net income (over a period) and investment (costs resulting from an investment of some resources at a point in time).

AKA: Return on Costs.
Context:
- It can be normalized by a Rate of Return on Investment.
- It can range from being an Actual ROI to being an Forecasted ROI (e.g. by an ROI analysis).
- It can be referenced during an ROI Analysis (that produces an ROI report).
- …
Example(s):
- (Gain from an investment - Cost of the Investment) / Cost of the Investment.
- ROMI.
- Nominal Return on a Stock Purchase between stock purchase in 1997 and stock sale in 2014.
- Increased sales to existing customers Achieved
- Lower average cost of sales, new & existing customers Achieved
- Improved new-customer acquisition Achieved
- Higher customer retention and loyalty / lower churn Achieved
- Reduction in required staff/higher staff productivity Achieved
- …
Counter-Example(s):
- Gross Revenue.
- Net Present Value (NPV).
- a Qualitative Investment Result:
  - Higher satisfaction ratings Achieved
  - Fewer issues reported and/or service complaints Achieved
  - Faster processing of claims/requests/casework Achieved
  - More accurate processing of claims/requests/casework Achieved
  - Higher search ranking, Web traffic, or ad response Achieved
See: Business Case, Business Driver, Average Annual Rate of Return.

References

(Wikipedia, 2022) ⇒ https://en.wikipedia.org/wiki/Return_on_investment Retrieved:2022-1-12.
- Return on investment (ROI) or return on costs (ROC) is a ratio between net income (over a period) and investment (costs resulting from an investment of some resources at a point in time). A high ROI means the investment's gains compare favourably to its cost. As a performance measure, ROI is used to evaluate the efficiency of an investment or to compare the efficiencies of several different investments.^[1] In economic terms, it is one way of relating profits to capital invested.