What is return on investment and what does return on investment mean?

Return on investment is the main economic indicator for investors to measure whether it is worth investing and measuring the success of an investment

ROI = Net Profit Cost Invested.

Net profit refers to the actual profit after deducting taxes;

Extended information: Return on investment is a static analysis method to calculate the amount of income and depreciation accrued under normal production and operation conditions after the project is put into operation, and the amortization amount of intangible assets is used to recover the total investment of the project, and compares it with the industry benchmark investment period to analyze the financial benefits of the project investment.

The investment period indicator measures the speed at which the initial investment is recovered. The basic selection criteria are: when there is only one project to choose from, the investment period of the project should be less than the maximum standard set by the decision-maker; If there are multiple projects to choose from, the project with the shortest investment period should be selected on the premise that the investment period of the project is less than the maximum standard required by the decision-maker.

Return on investment refers to the value that should be returned through investment, that is, the economic return that a business receives from an investment activity.

ROI formula = annual profit or average annual profit 100% of the total investment

Enterprises can improve profit margins by reducing the cost of sales; Improve asset efficiency to increase ROI.

The advantage of ROI is that it is simple to calculate; The disadvantage is that the time value of funds is not considered, and the impact of the length of the construction period and the different investment methods and the existence of the first amount on the project cannot be correctly reflected, and the comparability of the numerator and denominator calculation caliber is poor, and the net cash flow information cannot be directly used. Only investments with an investment rate of return index greater than or equal to the rate of return on risk-free investments are financially viable.

The most commonly used measures are gross profit margin on total assets and net profit margin on equity.

Net profit margin on total assets = profit after tax Total assets.

Net profit margin on equity = profit after tax Owner's equity.

The return demanded by an investor depends on how risky the investment is in his or her mind. If an investment is extremely risky, investors expect a high rate of return.

Risk factors include time and liquidity. The longer an investment takes, the higher its rate of return should be. The longer someone uses your money, the more likely it is that your money will be lost due to some unforeseen accident.

As an investor, you'll want to be compensated for that risk.

Return on investment is the return on investment, which can be measured by return on investment.

Return on investment refers to the normal annual profit or average annual profit as a percentage of the total investment during the production period. It is calculated as follows: Return on Investment (ROI) = Annual Profit or Average Annual Profit 100% of the total investment

Profit after deducting time value.

Usually the rate of return is called returnoninvestment ("return" means "profit", and the preposition "on" means "divide"), which is expressed as a percentage of the initial investment.

Return on investment (ROI) refers to the value that should be returned through an investment, that is, the economic return that a business receives from an investment activity. It covers the profitability goals of the business. Profits are related to the assets that are necessary to invest in the operation, because managers must make profits from investments and existing assets.

Investment can be divided into two categories: industrial investment and financial investment.

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 the cost of sales; Improve asset efficiency to increase ROI. The advantage of return on investment (ROI) is that it is simple to calculate. Return on investment (ROI) tends to be time-sensitive – returns are usually based on certain specific years.

Investment refers to the economic behavior of a specific economic entity in order to obtain income or capital appreciation in the foreseeable future period, and to invest a sufficient amount of funds or monetary equivalents in kind into the subject matter of a certain field in a certain period of time. Partnership, that is, two or more groups of people give full play to their respective advantages and work together to do something that can bring them economic benefits. Investment can be divided into physical investment, capital investment and ** investment.

The former is to invest money in the enterprise and obtain a certain profit through production and business activities. The latter is to purchase the ** and corporate bonds issued by the enterprise with money, and indirectly participate in the profit distribution of the enterprise. Partnership refers to a for-profit organization established within the territory of China by natural persons, legal persons and other organizations in accordance with the Partnership Enterprise Law of the People's Republic of China, where two or more partners enter into a partnership agreement to jointly contribute, operate in partnership, share profits and share risks for the purpose of operating a common business.

It includes general partnerships and limited partnerships. To put it simply, investment is just to contribute money and not participate in the management of the company and profit from it, while partnership is to contribute together, operate in partnership, and share benefits.

To understand ROI, you must first understand what is an investment?

"Investing" means investing your personal money, time, or energy resources into something you expect to be profitable or satisfyingly rewarding. Starting your own company is a big investment in using your own resources. What kind of company do you decide to start, is it the best investment of your money, time and energy?

It's the same with investing**.

So what does ROI mean?

Starting a business means investing your time, energy, and money in a long-term, day-to-day way. You do this because you believe that one day the company's return will be greater than the value of the time, effort, and money invested so far. Inadvertently, you've calculated your ROI and have found that the rate of return to be acceptable.

Businessmen need to understand what their ROI will be. Usually the rate of return is referred to as the return on

investment ("return" means "profit", and the preposition "on" means "divide"), which is expressed as a percentage of the initial investment.

I've found that any young person can learn how to calculate returns. In my company, I see that the rate of return is an extremely important decision-making aid for a new entrepreneur. I take 32

I started with $000, and for every penny I spent, I calculated how much return the investment would bring. I asked myself: Will this spend increase my ROI? This constant analysis has really helped me a lot.

So how exactly do you calculate ROI?

Here's how to calculate your return on investment:

1. First of all, calculate the amount of property you own at the end of a certain business period, which is called your ending property and a.

2. Deduct your initial investment in the company. The initial investment amount becomes your initial property with b.

3. The result is divided by your initial property.

4. Finally, multiply by 100 to indicate the percentage of your return.

Formula: A-BB 100=ROI (Return on Investment).

Usually the rate of return is called returnoninvestment ("return" means "profit", and the preposition "on" means "divide"), which is expressed as a percentage of the initial investment.

The word return on investment belongs to one of the core vocabulary of CMA, learning the core vocabulary of CMA makes you feel like a fish in water in learning, this word means: the profit or loss of a total investment transaction, generally expressed as an annual return percentage.

Return on investment. Hello, dear, I'm glad to answer your questions. Return on investment refers to the ratio between the benefits earned on an investment and the cost of the investment.

It is usually expressed as a percentage or multiple. The higher the return on investment, the higher the return on investment, and the higher the risk of investment. ROI can be calculated by the following formula:

Return on Investment = Investment Income - Investment Cost) Investment Cost 100% For example, if a person invests 1000 yuan and finally gets a gain of 1200 yuan, then his return on investment is (1200-1000) 1000 100% = 20%. Return on investment is an important indicator to measure the effectiveness of investment, but it is not the only indicator. Investors should consider a variety of factors, including risk, liquidity, stability, etc., to assess the value and risk of an investment.

Return on investment. Return on investment (ROI) refers to the ratio of the economic benefits of an investment to the cost of an investment. It is usually expressed as a percentage or multiple, and is one of the important indicators to evaluate the effect of investment.

The formula for calculating ROI is: (Investment Income - Investment Cost) Investment Cost x 100%. In its trembling posture, investment income includes direct income and indirect income from investment, such as sales, profits, market share, etc.

Investment costs include expenditures on investment funds, human resources, equipment, etc. For example, a company invested $1 million in the development of a new product and ended up with $2 million in revenue. Then the ROI of the investment is:

$2,000,000 - $1,000,000) $1,000,000 x 100% = 100%. This means that the investment brings benefits equal to the cost of investment, the return on investment is high, and the investment effect is better. It should be noted that ROI cannot be used alone to evaluate the advantages and disadvantages of an investment project, and it also needs to be comprehensively considered in combination with other indicators, such as investment risk, investment cycle, market prospects, etc.

Static investment ** period calculation formula: static ** period = original investment amount annual net cash flow.

If it is announced by the construction period, consider the static ** period of the construction period = construction period + static ** period.

When the net cash flow in the future is not equal, the static ** period calculation formula: the ** period is determined according to the accumulated cash flow (the number of years in the previous year + the difference in the current year).

The formula for calculating the dynamic period is: p't = (number of years in which the present value of accumulated net cash flows has shown positive tremors - 1) + absolute value of the present value of accumulated net cash flows in the previous year The present value of net cash flows in positive years.

Static Investment** Period:

The static investment period is the time required for the entire investment of the project with the net income of the project without considering the time value of the funds. The investment period can be calculated from the year of the commencement of the construction of the project or from the year of the commissioning of the project, but it should be indicated.

The static investment period can be calculated according to the cash flow statement, and its specific calculation is divided into the following two situations:

1. The net income (i.e., net cash flow) of each year after the project is completed and put into operation.

2. The net income of each year after the project is completed and put into operation is not the same, and the static investment period can be obtained according to the cumulative net cash flow, that is, the year between the cumulative net cash flow in the cash flow statement from negative to positive.