Analytics•3 min read
Return On InvestmentAlso known as: ROI
Definition
Performance measure evaluating efficiency of an investment.
Detailed Explanation
Return on Investment (ROI) is a performance measure used to evaluate the efficiency of an investment. In e-commerce, it is used to assess the profitability of marketing campaigns, technology investments, and business decisions. A positive ROI means the investment generated more value than it cost.
Key Points to Remember
- 1Formula: (Gain - Cost) ÷ Cost × 100
- 2Expressed as percentage
- 3Used for any business investment
- 4Compare against cost of capital
- 5Time factor matters