Question

Expand R.O.I.

Hint:

ROI is a universal metric. A higher ROI means the investment's gains compare favorably to its cost. It is a key ratio for assessing overall business performance.

Answer 1

Step 1: Understanding the Concept:
In accounting and finance, acronyms are frequently used for common metrics. R.O.I. is one of the most fundamental profitability ratios.

Step 2: Detailed Explanation:
R.O.I. stands for Return on Investment. It is a performance measure used to evaluate the efficiency or profitability of an investment. It calculates the return (profit or loss) generated relative to the cost of the investment, usually expressed as a percentage. The formula generally used is:
\[ \text{ROI} = \left( \frac{\text{Net Profit}}{\text{Capital Employed}} \right) \times 100 \]

Step 3: Final Answer:
R.O.I. stands for Return On Investment.