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Return on investment ( ROI ) its measures the gain or loss generated on an investement relative to the amoumt invested. ROI is normaly expressed as an percentage and its typically used for pessonals / entites financial decisions, to compare a companys profitability or to the efficiency of investements.
ROI formula = ( net profit / value investing ) x100
simple equation:
(Gain on invement - cost of investment) / cost of the investment.
Lets say you purchased a stock for AED40. The stock has paid0 dividend. After one month, you sold the stock for AED50. ROE = (50+0-40)/40=0.25
Heba you need to add a bit detail about on which source you want to calculate ROI. Likewise, we in HR calc such investment on training initatives and this is a bit tricky and tough to calculate. Though such reflection can be measured through performance. Well, in financial term its all about having greater amount than investment is good ROI.
By comparing :
Total Investment/Expenses & Total Income.
A too broad question, Heba, indeed! But a good one, worthy of an answer.
ROI to me is broadly defined as "a performance measure used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investment".
Investment herein & the return on it, can be anything tangible or intangible. ROI for sales & marketing is different from ROI for recruitment. By the same token, ROI for a sales email marketing campaign aimed at generating sales is different from ROI for a PR email marketing campaign aimed at reputation damage management.
Calculate your net profit by subtracting your overall costs from your AdWords revenue for a given time period. Then divide your net profit by your overall costs to get your ROI for that time period. Here's an example:
($1300 - $1000) / $1000 = 0.3 Your revenue (measured by conversions) Your overall costs Your overall costs Your ratio of profit to overall cost is30% -- this is your ROI.
