Question

Which analytics is used to measure return on market investment?

Answer 1

The financial world is riddled with jargon and a multiple of confusing words. Without the understanding of these, it may be difficult to survive in a world filled with bankers, investors and complexed corporate environments. So, without further delay, here is everything you need to know about Return on Investment (ROI).

Return on Investment is a measure of performance, as it is used to evaluate the efficiency of the investment of interest. It can also be used as a comparative tool, as it provides information about multiple investments in a manner that is easily understood and analyzed. This is achieved through the return on investment formula which gives a quantitative analysis of the amount of return of an investment in relation to its cost.

It provides an easily usable formula that has many practical uses. For example, one is able to compare the Return on Investment from a range of assets that are not generally compared. Therefore, one could compare performance on the stock market with that of a new niche start-up by simply plugging the correct financials into the Return on Investment equation.