## What is the formula for return on investment?

Return on investment, or ROI, is the ratio of a profit or loss made in a fiscal year expressed in terms of an investment and shown as a percentage of increase or decrease in the value of the investment during the year in question. The basic formula for ROI is: ROI = Net Profit / Total Investment * 100.

## What is a return on your investment?

Return on Investment (ROI) is a performance measure used to evaluate the efficiency of an investment or compare the efficiency of a number of different investments.

## What is a good ROI percentage?

12 percent

## What is a good ROI?

A good marketing ROI is 5:1.

A 5:1 ratio is in the middle of the bell curve. A ratio over 5:1 is considered strong for most businesses, and a 10:1 ratio is exceptional. Achieving a ratio higher than 10:1 ratio is possible, but it shouldn’t be the expectation.

## How do we calculate return?

Key Terms

- Rate of return – the amount you receive after the cost of an initial investment, calculated in the form of a percentage.
- Rate of return formula – ((Current value – original value) / original value) x 100 = rate of return.
- Current value – the current price of the item.

## How do you calculate simple rate of return?

The simple rate of return is calculated by taking the annual incremental net operating income and dividing by the initial investment.

## How can I get a 15 return on investment?

The basic calculation is as follows: buy a 6% cap rate property with a 30% down payment at a 5% interest rate. The cash-on-cash yield works out to be 8.3%. Factor in appreciation at 2% (the approximate current rate of inflation), and you get another 6.7% of total returns, putting you at 15% total returns.

## What is a 50 return on investment?

For example, if you had a net revenue of $30,000 and your investment cost you $20,000, your ROI is 0.5 (or 50%). ROI = (gain from investment – cost of investment) / cost of investment.

## How do you increase return on investment?

Improve Your Investment Returns with These 7 Strategies

- Find Lower Cost Ways to Invest. …
- Get Serious About Diversifying Your Portfolio. …
- Rebalance Regularly. …
- Take Advantage of Tax Efficient Investing. …
- Tune-Out the “Experts” …
- Continue Investing in Your Portfolio No Matter What the Market is Doing. …
- Think Long-term.