Return on Investment (ROI)

ROI (Return on Investment) measures the efficiency of an investment by comparing the gain relative to its cost. It is calculated as:

ROI=Net Gain from Investment−Cost of InvestmentCost of Investment×100ROI = \frac{\text{Net Gain from Investment} - \text{Cost of Investment}}{\text{Cost of Investment}} \times 100

Example:

Suppose an initiative costs £500,000 and results in a net gain of £1,200,000.

ROI=1,200,000−500,000500,000×100=700,000500,000×100=140%ROI = \frac{1,200,000 - 500,000}{500,000} \times 100 = \frac{700,000}{500,000} \times 100 = 140\%

This means the investment generated a 140% return over its initial cost.

Created: June 15, 2026Last modified: June 15, 2026