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return on investment
This term is a standard technical metric in finance and business accounting. It is used to quantify the profitability of an expenditure, allowing stakeholders to determine if the gain justifies the initial cost. While it is a mathematical ratio, it is frequently used in corporate strategy meetings to justify budget allocations or to critique the failure of a project.
In professional contexts, it is almost universally abbreviated as ROI. When used as a noun, it typically refers to the percentage result of the calculation, though it can also refer to the general concept of gain relative to cost.
Meanings
A financial metric used to evaluate the efficiency of an investment or compare the efficiency of several different investments, calculated as the ratio of net profit to the initial cost of the investment.