Insert the information in the form and the calculator will determine the return on investment.

What is the return on investment?

Reutn on investment is a formula used to measure the profit derived from any investment. It is a ratio that compares between the gain or loss from an investment realtive to the investment's cost.

How to calculate return on investment?

To calculate return on investment you should use the following formula:
reutn on investment = (earned ammount - investment ammount) / investment ammount

example: John has a video games company. From the beginning until now, he invested $90,000 in his company and his total profits from the company is $110,000 calculate the return on investment of John's company?

Using the return on investment formula the answer will be:
reutn on investment = (earned ammount - investment ammount) / investment ammount
reutn on investment = ($110,000 - $90,000) / $90,000
reutn on investment = 0.22

Why use return on investment?

Investors use return on investment because it is useful to evaluate the potential return on an investment, and investors usually use it to evaluate their stock portfolio's performance to decide if they should undertake a new project.