Return on Investment (ROI) analysis is one of several commonly used approaches for evaluating the financial consequences of business investments, decisions, or actions.
ROI analysis compares the magnitude and timing of investment gains directly with the magnitude and timing of investment costs. A high ROI means that investment gains compare favorably to investment costs.
In the last few decades, ROI has become a central financial metric for asset purchase decisions, approval and funding decisions for projects and programs of all kinds, and more traditional investment decisions (such as buying a business).
Return on investment is frequently derived as the “return” (incremental gain) from an action divided by the cost of that action. That is “simple ROI,” as used in business case analysis and other forms of cash flow analysis. Simple ROI is the most frequently used form of ROI and the most easily understood. With simple ROI, incremental gains from the investment are divided by investment costs.
The businesses listed below all have a good ROI.