Return on Investment
ROI
Beginner Level
Global
Corporate Finance
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Definition
A performance measure used to evaluate the efficiency of an investment, calculated as (Gain - Cost) / Cost × 100.
Detailed Explanation
ROI is expressed as a percentage and helps compare different investments. Higher ROI indicates better investment efficiency. It doesn't account for time, so annualized ROI is often used.
Example
Investing ₹1 lakh and receiving ₹1.5 lakh back gives an ROI of 50%.
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