ROI (Return on Investment) is a relatively simple concept, which refers to the degree of return on investment made by enterprises. IDC says ROI is the net income of investments of different scales (including reduced costs and increased income).

Return on investment (ROI)= annual profit or average annual profit/total investment × 100%. As can be seen from the formula, enterprises can improve profit margins by reducing sales costs; Improve the efficiency of asset utilization to improve the return on investment. The advantage of return on investment (ROI) lies in its simple calculation. Return on investment (ROI) is usually time-sensitive-the return is usually based on a specific year.

The investment return rate of the extended data can reflect the comprehensive profitability of investment centers, and it is horizontal comparability because it eliminates the incomparable factors of profit difference caused by different investment amounts, which is conducive to judging the operating performance of each investment center. In addition, the investment profit rate can be used as the basis for choosing investment opportunities, which is conducive to optimizing resource allocation.

Reference Return on Investment _ Baidu Encyclopedia