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What is The Return On Investment Formula?

Return on investment formula

So How To Does The Return On Investment Formula Looks Like?

In the online marketing world it looks like this:

Return\quad On\quad Investment\quad =\frac { Revenue\quad -\quad Investment\quad }{ Investment }

The return on investment is expressed as a percentage and as such can express how efficient was the online marketing budget spent in generating revenue. So a low value of ROI represents inefficient marketing spend vs the revenue while a high value of ROI represents the opposite meaning.

The Return on investment formula can also be either negative of positive. The negative value is produced in case the revenue was less than the investment, while a positive value is produced when the revenue is more than the investment.

How Should You Treat The Return On Investment Formula?

You should always be aware of not getting a negative value that can be received from the return on investment formula, unless this negative value is planned as part of penetration strategy to new markets and is supposed to become positive after the establishment of the brand in those new markets.

The post What is The Return On Investment Formula? appeared first on Metrics Meaning.

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What is The Return On Investment Formula?


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