You literally hear the term “Return On Investment” or “ROI” all the time whenever someone is analyzing an investment… but what does it actually mean?
Through this video, I’ve provided not just a definition of the ROI but also a detailed ROI explanation, including examples as well as the return on investment formula for your calculation needs.
As you’ll be able to find out, just like any other metric, the return on investment has its limitations.
For example, the ROI doesn’t factor in the time dimension. In other words, an ROI of x% might be great if you only had to wait three years but if you had to wait ten times more… not so much 🙂
All in all, the return on investment is definitely a tool you cannot afford not to include in your knowledge bag and it can be ridiculously useful, as long as you always understand what and why you’re measuring 🙂
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