Return on Investment (ROI)
Reference model
ROI is expressed as a percentage and provides insight into the profitability of an investment.
About this model
A financial metric used to evaluate the efficiency of an investment by comparing the gain or loss from an investment relative to its cost.
Originator not stated.
How to read it
- A higher ROI indicates a more profitable investment.
- Compare ROI across different investments to determine the best option.
What this does
Calculates the financial return generated from an investment relative to its cost, helping to assess the profitability of an investment.
When to use it
Use it when evaluating the financial performance of an investment or project to determine its effectiveness.
Not when: Do not use it when the investment's benefits are non-financial or when the time frame is not clearly defined.
What happens next
Consider a detailed financial analysis for deeper insights into cash flow and profitability.
Golden thread
Builds on ←
A starting point: it needs no earlier tool.
Feeds into →
- Investment analysis report
Use this tool, free
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Drafted with AI and reviewed by Eccellere on 04/11/2026. Guidance, not advice: apply your own judgement.