Definitions for **"Return on Investment"**

ROI. A measure of a corporations profitability, equal to a fiscal years income...

ROI is commonly used as a test of a company's profitability. Investors can compare this figure to other types of investments. To calculate your ROI divide the net profits by total assets.

The rate of return a company gets from its own investment. It is calculated by dividing the company's net income by its net assets.

The sales return on the advertising expenditures invested in media.

A financial measure used to quantify the desirability of promoting a particular effort. Return on Investment compares the benefits returned to the enterprise against the cost required to implement it. It is usually express as a ratio.

A measure of operating performance and efficiency in utilizing assets computed in its simplest form by dividing net income by average total assets.

Anticipated profits above costs incurred.

What you earn from your investments, including dividends, interest or other income and realised capital gains. Return is usually expressed as a percentage of the amount invested.

The money a homeowner will recoup after investing in a home improvement project. Depending on the project, homeowners might not get any return on investment at all. Or the return might come only after a certain number of years, or it might be only a percentage of the money spent.

A measure of the benefit of investing resources into something, as measured by the cost savings (cost avoidance) or profit to be gained over a period of time as a result of the investment. The Break Even Time (BET) should be examined as part of analyzing ROI.

A number-crunchers delight that brings together investment and return on that which goes into building and maintaining a website and its e-commerce solutions.

the ratio of projected cost savings versus amount invested. Typically calculated as: ROI% = (Average Annual Savings divided by Investment) X 100

A measure of the profitability of a business enterprise. The general form is profit divided by investment, but the calculations can take many alternative forms. Investment can refer to stockholders' equity only, or can also include long-term borrowed funds, or all resources available to a company (that is, total assets). Profits can be before or after corporate income taxes. Also referred to as a rate of return.

This can be calculated by dividing the net income by the amount of capital invested in the company. ROI can be increased two ways reduce expenses or increase sales.

the amount earned in direct proportion to the capital invested.

A profitability measurement of an investment in a company, equal to the net income from the investment divided by the investment.

The ratio of income produced by an asset divided by its investment cost.

The calculations or expectations which franchisees work on to assess when they can 'break even' on their initial investment in the franchise and start earning profits.

A measurement of the profitability of a company based on income in the fiscal year divided by stock equity and debt. Sometimes used in place of Return.

The percentage that the annual cash flow after the debt service is of the cash investment in the property.

ROI. The rate of growth of the value of an investment. Riskier investments pay higher rates of return, while safer investments, such as U.S. treasury bills, pay little more than the rate of inflation.

A measure of how much the company earns on the money the company itself has invested. It is calculated by dividing the company's net income by its net assets.

When someone spends money it is with the expectation that whatever they have spent will derive a value equal to or greater than what was spent. This is the return on investment. Generally people view ROI in financial terms. For example, I purchase a $1000.00 tool that is going to allow me to work faster. Working faster will allow me to save $100.00 per month in costs and the tool has a 2-year life expectancy. This means total savings of $2400.00 over the life of the tool. When I subtract the cost to purchase the tool, I am left with a $1400.00 return on my investment.

Generally, book income as a proportion of the book value of equity.

This is a measurement which shows the current or expected future value of a project or an investment. In relation to Search Engine Marketing (or any marketing activity), it is a measurement that shows what the advertiser receives in return for the cost of the advertising. This will normally refer to new sales in this case. If an advertiser has spent £200 on a campaign and has generated £300 in additional sales then the ROI would be 150%.

The monetary value that an automated help desk brings to your organization. Generally, the return divided by the help desk operating costs.

An accounting ratio expressing the profit of an organization for a financial year as a percentage of the capital employed. Used ratios for assessing the performance of organizations. Profit is usually taken as profit before interest and tax, while capital employed refers to fixed assets plus working capital minus current liabilities.

An indicator of profitability. ROI is calculated by dividing earnings by total assets. ROI is more telling than a company's return on equity (ROE) because it indicates how well a company's management is using its resources. Also known as return on invested capital (ROIC).

Return on investment gives you a return value for the life of the investment, not just a gain or loss, or the year-to-date return.

The profit an investment generates as a proportion of the value of the assets used to generate it. EBIT Ã· value of assets.... more on: Return on investment

The direct attributable value an organization realizes from an investment. ()

The time it takes to pay back (or recoup) the amount of money invested in a technology or strategy.

Ratio measure of the profits achieved by a firm through its basic operations. An indicator of management's general effectiveness and efficiency. The simplest version is the ratio of net income to total assets.

Ratio measuring the degree of success of a marketing campaign, by comparing incremental sales vs. the sum invested in promotion.

Acronym for return on investment, a method to assist management decision making by evaluating the return on various investment alternatives.

The percentage of profit made on an investment.

A ratio of resources required versus benefits generated. It measures the success of an investment.

(ROI) - Used informally here as a synonym for earnings yield. It is the inversion of a P/E. That is, it is a stock's earnings per share divided by its price. It is expressed as a percentage, and shows what percentage return the company earns on the money invested in it right now, without consideration of past equity or assets.

Commonly referred to as ROI. The profit from an investment as a percentage of the amount invested. In marketing programs, typically all of the costs associated with a specific marketing initiative are used as the base. The net profits associated with the program are then divided by the costs to determine the ROI.

Normally refers to the annual return on capital; i.e., if your savings account pays 4.1% interest, that is the ROI. If $100 were invested and earned 50% over two years, it would be worth $225. Total ROI is the total percentage increase over the life of the investment.

How much money is generated against money spent.

Broadly defined as net income divided by investment. Often used in a general sense referring to the overall return on investment of a project or initiative, and sometimes used in place of Simple ROI.

How much profit is generated per money spent on an advertising method.

The amount of profit generated per dollar spent on a business, including product, service and advertising costs.

A measure of the success of a campaign; the amount of revenue generated from an initial investment.

A percentual expression of the amount of money you gain for the sum you invest.

The value that an organisation derives from investing in a project

An amount of money that is included in the price of a product or service. It can be considered an expense since the business is expected to make enough money to pay this amount to the original investors. Return on investment is normally shown as a percent. For example, let's say you put up $1,000 to start up a small business and you wanted a 10 percent return after one year for that investment. You are expecting the business to be able to pay all expenses, still have your original $1,000 plus an additional 10 % or $100 for a total of $1,100. A 10% return on an investment of $1,000 is $100.

(ROI) - the value received (as defined by sponsor: sales, benefit value, brand awareness, etc.) from an investment.

A wide term which generally refers to the rate of return achieved by an investment based on a principal amount which was invested initially.

The ROI is how much "return," usually profit or cost saving results from an incentive program.

The profit or loss resulting from a business transaction, often expressed as an annual percentage rate.

Return on Investment (abbreviated ROI) is a measure of a company's ability to use its assets to generate additional value for shareholders. It is calculated as Net Profit divided by Net Worth, and expressed as a percentage.

In general, this means how much benefit a particular investment gives you. In the context of pay-per-click advertising, ROI is calculated by dividing the profit from the PPC adverts by the amount spent on PPC. That tells you how much profit you get from each Euro, Pound, or Dollar of PPC advertising.

ROI is the term used for the amount of sales generated from the spend.

is the ratio of Net Income divided by the Book Value of Assets. ROI is a commonly used measure at the business unit or divisional level. (ROE is commonly used at the corporate level. ROI and ROE are both subject to accounting conventions and distortions. Discounted Cash Flow measurement is often used to overcome accounting distortions because it is an economic measure.)

A measure of the gain on a given investment used to determine the level of success of a particular venture.

A profit or loss from an investment. Advice: An individual's return on investment is easy to calculate. If you invested $20 and earned $30, you would have a 50% return on your investment.

Your return on investment is the profit you make on the sale of a security or other asset divided by the amount of your investment, expressed as an annual percentage rate.

Amount of profit made after investment costs and other costs have been recouped.

Net profits divided by net worth or total equity; yet another measure of profitability. Also called ROI.

For a given use of money in an enterprise, the ROI (return on investment) is how much profit or cost saving is realized. An ROI calculation is sometimes used along with other approaches to develop a business case for a given proposal. The overall ROI for an enterprise is sometimes used as a way to grade how well an organization is managed.

A comparison of the monetary value of the business impact with the costs for a given human capital program. ROI is usually expressed as a percentage. ROI is part of a comprehensive measurement and evaluation system; there are various models to determine ROI.

Profit divided by fixed capital and multiplied by 100. This indicator is often used by investors in making comparisons between various investment possibilities.

Net profit divided by total assets. Measures how much the business owner has earned on his/her investment in the business.

A rate, expressed as a percentage, at which money is being earned from an investment.

The amount of money made from a search engine marketing campaign less the investment or money spent on the campaign.

Determined by a basic formula, measures how effectively the marketing investment is used to generate net profit from an activity. The higher the ROI, the better.

Financial gain expressed as a percentage of funds invested to generate that gain.

the annual rate at which an investment earns income. It is calculated by dividing the annual earnings by the investment. For instances, a bank savings account paying $3 per year per $100 investment has an ROI of 3% ($3 / $100). An efficiency investment's ROI comes not from money paid to you, but rather from money saved by you on your energy bills.

Return on Investment (ROI) of the project shows how much the project benefits the organization in comparison to cost savings or cost avoidance.

The amount of profit divided by the amount spent to achieve that profit all multiplied by 100.

The ratio of cost of advertising to benefit gain from that advertising. Essentially the concept is to gauge if a particular marketing strategy is profitable.

The income that an investment provides in a year.

Benefits of a project (over a set time period) divided by the amount invested in the project.

A measure of the amount of money lost or earned on an investment compared to the amount of money invested. Normally expressed as a percentage. Example: If you spend $1,000 on a pay-per-click campaign and generate $1,450 in revenue from this campaign, your ROI would be 45%.

"what it's all about" Refers to the percentage of profit or revenue generated from a specific activity.

A figure of merit used to help make capital investment decisions. ROI is calculated by considering the annual benefit divided by the investment amount. [GAO

Value or profit gained as a result of dollars spent, as in an improvement or addition.

The value realised from the investment made in your website.

Generally, the amount of net profit earned by the principal amount invested. With mutual funds, ROI is the net income (including all share distributions) earned in relation to the size of... read full article

The gross profit for any specific business expense.

a measure of the effectiveness and efficiency with which managers use the resources available to them, expressed as a percentage. Return on equity is usually net profit after taxes divided by the shareholders' equity. Return on invested capital is usually net profit after taxes plus interest paid on long-term debt divided by the equity plus the long-term debt. Return on assets used is usually the operating profit divided by the assets used to produce the profit. Typically used to evaluate divisions or subsidiaries. ROI is very useful but can only be used to compare consistent entities -- similar companies in the same industry or the same company over a period of time. Different companies and different industries have different ROIs.

( ROI) - ROI return.

The actual or perceived future value of an expense or investment. Ad campaign ROI is a metric that attempts to determine what the advertiser receives in return for the cost of the advertising, usually in terms of new sales. This is a measure of your profits of a campaign after all associated costs have been deducted. The higher the ROI, the higher the success level of the campaign.

(ROI) The interest rate at which the net present value of a project is zero. Multiple values are possible.

A measure of a corporationâ€™s profitability, equal to a fiscal yearâ€™s income divided by common stock and preferred stock equity plus long-term debt. ROI measures how effectively the firm uses its capital to generate profit. So, the higher the ROI, the better.

A ratio of the benefit or profit derived from a specific investment compared to the cost of the investment itself.

See Return on Invested Capital and Return on Equity.

A financial measure of the relative return from an investment, usually expressed as a percentage of earnings produced by an asset to the amount invested in the asset.

The total gross profit that one dollar, initially invested in inventory as it is depleted, will return during a period of time. Computed by dividing the total Gross Profit generated by the item by the amount of the initial investment in inventory.

A common term used in the marketing industry and business in general to express the gain realized on making a specific investment.

The time it takes improvements in revenue or cost savings directly related to a company's particular investment to exceed the total cost of that investment

A financial measure of the relative value of an investment, usually expressed as a percentage, calculated by dividing earnings produced by the amount invested. See Payback.

A financial metric used to assess projects (ROI = profit/average capital*100).

(ROI) n. l. a measure of the efficiency of an organization or program, calculated as the ratio of net income received to the expended funds; 2. the monetary amount derived by this calculation.

The profit gained as the result of money spent on an improvement or addition to a home or property.

This is a calculation of the financial benefits of a workplace education program in relationship to its cost. It is usually expressed as a percentage of the original investment.

The ratio of the cost of implementing a project, product or service and the savings as a result of completing the activity in terms of either internal savings, increased external revenue or a combination of the two. For instance, in simplistic terms if the internal cost of ICT cabling of office moves is $100,000 per annum and a structured cabling system can be installed for $300,000, then an ROI will be achieved after approximately three years.

The financial return/sales you receive directly from your investment in brand development.

Return on Investment is shown as a percentage. It is the percentage of money that you make back annually from the downpayment required to make an investment. For example: You invest $12,000 and you make back $100 per month or $1,200 annually, you would make a 10% Return On Investment (ROI). Most RRSP's and Mutual Fund investments have an ROI between 3 - 10%. It is not uncommon for a Real Estate Investment to earn an ROI of over 25%.

profit (or loss) on an investment, often expressed as a percentage.

The return on investment is the percentage of profit that you make on an investment. If you put $1,000 into an investment, and one year later your account is worth $1,100, you have made a profit of $100. Your return is the profit ($100) divided by the initial investment ($1,000) - 10 percent. See also leverage.

Investment expenditures recovered or compensated.

The return on investment is the percentage of profit that an investor makes on an investment. If, for example, you put $1,000 into an investment and a year later sell the investment for $1,100, you make $100. You calculate ROI by dividing the profit ($100) by your original investment ($1,000), which equals a 10 percent return Related Glossary Terms: leverage

Profit or loss as percentage of an investment

The amount of profit a property generates.

The internal rate of return on an investment.

The bottom line; that is, the amount of money you make as compared to the amount of money you have spent. Many tools exist to help you calculate your ROI for whatever undertaking, including pay-per-click campaigns.

How much money you make from your investment.

The amount of profit (return) based on the amount of resources (funds) used to produce it. Also, the ability of a given investment to earn a return for its use.

A financial analysis ratio that measures an investor's return on investment, equal to a fiscal year's net income divided by common stock and preferred stock plus long-term debt.

Return/Investment; the percentage of income earned vs. total investment.

Net profit divided by net worth. This ratio tends to magnify short-term shifts in thinly capitalized companies.

Return on Investment or ROI is a return ratio that compares the net benefits of a project, verses its total costs. ROI is a measure of operating performance and efficiency in utilizing assets by a company.

Percentage of profit or revenue generated from a specific activity (Source: SEMPO)

An estimate of the financial benefit (the return) on money spent (the investment) on a particular initiative.

(Financial ratio analysis based) A financial analysis tool measuring performance of an overall investment and derived by dividing net income by average total assets.

The annual net income expressed as a percentage of the (average) amount invested. It is a measure of relative profitability and can be used for ranking alternative investment opportunities.

An analysis of a campaign's effectiveness that compares the revenue generated with the advertising investment.

A financial term which measures the worth of a project by measuring what benefits (return) accrue from an investment. Also known as ROI.

ROI. A measure of operating performance and efficiency in using assets computed by dividing net income by average total assets.

ROI): This is the amount derived from subtracting your net revenues from your total costs.

Generally, book income as a proportion of net book value.

The amount earned per year on an investment, usually expressed as a percentage.

The net profit generated by an investment over a specified period of time relative to the size of the investment. This measure is usually expressed as a percent. The ratio is defined as: Net Profit/Average Amount Invested. The higher the figure, the higher the return relative to the amount invested.

In direct response, the return on investment is one of the main ways to measure the effectiveness and profitability of any given promotional effort. Since response starts very quickly, dollars from an effort often permit multiple use of a given investment as the charges against that investment are being paid off. This provides particularly attractive 'return' on the original dollars put to risk.

The net annual income divided by the original cash investment equals a percentage return on investment. back to the top

In the private sector, the annual financial benefit after an investment minus the cost of the investment. In the public sector, cost reduction or cost avoidance obtained after an improvement in processes or systems, minus the cost of the improvement.

A ratio which is calculated as net profits after tax divided by investment. Français: Rentabilité de l'investissement Español: Rendimiento de las inversiones

Net income as a proportion of net book value or of initial investment outlay.

Net profit after taxes divided by total assets.

This is a ratio that measures how well the company makes use of it's money. The ROI looks at what the company is worth related to the amount of the original investment.

The ratio of money invested to profit. Usually only used in measuring tournament performance.

This is calculated by taking the value of the investment held at the beginning of the ROI period compared with the current value. In other words: ((Current Value) - (Beginning Value) + (Income)) / (Beginning Value), where (Current Value) = (the current total shares) * (the last price), (Beginning Value) = (number of shares held prior to the period - any shares sold) * (the closing price prior to the period) + the "Cost Basis" of any shares added in this period (Buys, Reinvest, Add Shares, etc), and (Income) = any income events such as Dividends/Interest (not Reinvested) and Realised gain/loss from Sells in this period.

There are various ways to determine ROI. One way is to estimate the extra money a new IT system will bring in, or its cost savings, minus its cost and depreciation. Overall, companies have several tools to calculate the return on IT investments or how they will impact the bottom line. When figuring the real cost of IT projects, Norton recommends that a company factor in training and consider hiring a full-time project manager to lower the risk that the investment may not produce the return the company is expecting. He notes that most IT projects take longer to complete than initially projected, and companies should take care to add more development time to their expense and earning projections.

A measure of a corporation's profitability; generally, the income an investment provides in a year.

Profit generated by a property, such as rents, etc. Usually stated with the profit as a percentage of the total amount invested.

The additional sum of money expected from an investment over and above the original investment.

A standard measure of project profitability, this is the discounted profits over the life of the project expressed as a percentage of initial investment. See: Left-Brained.

The actual or perceived future value of an expense or investment. Ad campaign ROI is a metric that attempts to determine what the advertiser receives in return for the cost of the advertising, usually in terms of new sales. The difficulty in determining ad campaign ROI is tied to the type of online campaign used.

A measure of a firm's profitability in which profits are expressed as a percentage of investment.

A concept used in business planning to determine the profit earned in relation to the value of the capital required to produce the profit.

The profit an investment generates, expressed as equity divided by cash flow.

The proceeds of an investment expressed as a percentage representing net income (including annual debt service) divided by initial capital invested

Ratio between net income after taxes and total owners' equity; also known as return on equity.

A financial calculation used to evaluate the economic benefits of pollution prevention alternatives.

The financial benefit resulting from a project once the cost of the project is deducted from the financial gain.

A generic ratio sometimes applied to PPC Marketing campaigns. See 'Return On Advertising Spend (ROAS)'.

The financial gains and other benefits received from the improvement or results associated with expenditure for services, tools, equipment, personnel, training, etc.

The percentage of revenue produced from a particular online campaign versus the cost of the campaign.

Describes the calculation of the financial return on a business initiative that incurs some cost.

Measurement by which the benefits realized from a business expenditure - often technology-related - offset or exceed its monetary cost.

The financial benefit obtained compared with the advertising campaign cost.

In fiscal evaluation, the ratio of benefits to costs, generally expressed as a percentage.

Calculation showing the value of expenditures for HR activities.

See return on capital employed (ROCE).

A means of evaluating the efficiency of management and the development of product lines for the comparison of companies. Calculated by dividing total capital into earnings.

A measurement used in financial analysis to judge the rate of return on all sources of long-term capital.

The reward that an investor gets, or hopes to get, for putting capital at risk.

See internal rate of return (IRR).

a business imperative

Part of the business case validation done during project initiation.

In relation to search engine advertising, it often refers to sales per lead.

The measurable revenue associated with a specific advertising program. Common to all media.

Return on Sales rich

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