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Posted: Sun Dec 22, 2024 5:47 am
ROI: definition, example and calculation of return on investment (ROI)
REY is the acronym for the English term Return On Investment . The translation into French is simple: it is simply the return on investment. If everyone has heard this expression at least once in their life and knows roughly what it means, let us recall its definition.
The “Return on Investment”, “ROI” or “ROI” as we discussed throughout this article, is a calculation expressed as a percentage and who will be able to positively evaluate the amount of money generated compared to the amount of money invested. So it is not just a question of “How much did we earn” or “how much did we lose”.
In addition to the financial gain (or loss) aspect that ROI will formulate, this is a real method to define what attitude to adopt towards investments. In fact, ROI will allow to see the financial scope of an investment, past or in progress, and even beyond estimating the return on a possible future investment.
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Note well: ROI, return on investment, rate of return, rate of profit, yield… You can find this notion under several names. KING However, it is widely used, just do a search on the web to realize how much this acronym is democratized and used in a good number of domains.
In marketing, ROI is ROI!
More seriously, ROI is useful for various actors in their development work. From the smallest investment to the largest speculation, ROI is a valuable tool for making accurate assessments and in-depth studies.
Small and medium-sized businesses use it to determine, for example, which investment will be the most financially efficient within the framework of their projects. The idea is to calculate the ROI of all the options in order to choose the most profitable one.
Investors use it to define which financial project(s) their money will be most profitable on.
ROI: Calculating the return on investment
We usually perform the ROI calculation with figures for a full year.
ROI = (positive or negative profit as a result of the investment – cost of investment) / cost of investment
Example of ROI calculation: You have invested 6,000 euros in an inbound marketing strategy that has generated 50,000 euros in turnover (billing) since its implementation. Your calculation will be: (50,000 – 6,000) / 6,000 = 7.33
Your ROI is 733%.
The above ROI calculation is a general formula, after all quite basic, which does not take into account the risk incurred, nor the different inflation rates nor the non-material benefits associated with the investment itself (better employee engagement, improved brand image, increased visibility, time saved, etc.). Depending on the planned investment, financial actors perform different operations and take into account various configurations.
ROI is a tool to understand and master, the result of which can help in making final investment decisions, as well as in analyzing their performance.
From now on, ROI no longer holds any secrets for you!
Do you like investment reviews? You'll love the following!
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REY is the acronym for the English term Return On Investment . The translation into French is simple: it is simply the return on investment. If everyone has heard this expression at least once in their life and knows roughly what it means, let us recall its definition.
The “Return on Investment”, “ROI” or “ROI” as we discussed throughout this article, is a calculation expressed as a percentage and who will be able to positively evaluate the amount of money generated compared to the amount of money invested. So it is not just a question of “How much did we earn” or “how much did we lose”.
In addition to the financial gain (or loss) aspect that ROI will formulate, this is a real method to define what attitude to adopt towards investments. In fact, ROI will allow to see the financial scope of an investment, past or in progress, and even beyond estimating the return on a possible future investment.
image
A LinkedIn™ profile
20 times more efficient.
Download the verification list
100% free. I agree to the privacy policy respectfully . It's not spam.
Note well: ROI, return on investment, rate of return, rate of profit, yield… You can find this notion under several names. KING However, it is widely used, just do a search on the web to realize how much this acronym is democratized and used in a good number of domains.
In marketing, ROI is ROI!
More seriously, ROI is useful for various actors in their development work. From the smallest investment to the largest speculation, ROI is a valuable tool for making accurate assessments and in-depth studies.
Small and medium-sized businesses use it to determine, for example, which investment will be the most financially efficient within the framework of their projects. The idea is to calculate the ROI of all the options in order to choose the most profitable one.
Investors use it to define which financial project(s) their money will be most profitable on.
ROI: Calculating the return on investment
We usually perform the ROI calculation with figures for a full year.
ROI = (positive or negative profit as a result of the investment – cost of investment) / cost of investment
Example of ROI calculation: You have invested 6,000 euros in an inbound marketing strategy that has generated 50,000 euros in turnover (billing) since its implementation. Your calculation will be: (50,000 – 6,000) / 6,000 = 7.33
Your ROI is 733%.
The above ROI calculation is a general formula, after all quite basic, which does not take into account the risk incurred, nor the different inflation rates nor the non-material benefits associated with the investment itself (better employee engagement, improved brand image, increased visibility, time saved, etc.). Depending on the planned investment, financial actors perform different operations and take into account various configurations.
ROI is a tool to understand and master, the result of which can help in making final investment decisions, as well as in analyzing their performance.
From now on, ROI no longer holds any secrets for you!
Do you like investment reviews? You'll love the following!
I offer you with an investment of € 0 to gain a LinkedIn profile 50 times more russian business email list influential, either for your personal use ( self-marketing ) or professional use to find clients with social selling .
This is my gift to you: click here to: have a LinkedIn profile 50 times more effective and influential .
Have you discovered me, do you have a challenge or would you like to achieve your professional goal thanks to LinkedIn and marketing? Tell me about your challenges during a phone meeting .
Marketing tools, software, resources and routines to be performed (at all levels)
How to make money: 10 great tips!
Types of marketing: 7 strategies to know and how to implement them?