Data Source and Methodology
All calculations are strictly based on the standard ROI formula. For more details, refer to financial authorities' guidelines.
The Formula Explained
ROI Formula: \( ROI = \left( \frac{\text{Final Value} - \text{Initial Investment}}{\text{Initial Investment}} \right) \times 100 \)
Glossary of Terms
- Initial Investment: The amount of money invested initially.
- Final Value: The current value of the investment.
- ROI: Return on Investment, a measure of the profitability of an investment.
Frequently Asked Questions (FAQ)
What is ROI?
ROI, or Return on Investment, is a measure used to evaluate the efficiency of an investment or compare the efficiency of several different investments.
How is ROI calculated?
ROI is calculated by dividing the net profit by the initial cost of the investment, then multiplying by 100 to get a percentage.
Why is ROI important?
ROI is important because it provides a metric for comparing the profitability of investments, helping investors make informed decisions.
Can ROI be negative?
Yes, a negative ROI indicates that the investment resulted in a loss.