Accounting Dictionary - Letter R

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Return on investment (ROI)
evaluates the profitability of an investment in relation to the invested capital. When talking about a company’s performance, return on investment is the net earnings divided by either average assets (similar to the return on assets ratio) or shareholder’s equity (similar to the return on equity ratio). The return on investment ratio is calculated by dividing (a) the gain from investment less cost of investment by (b) the cost of investment.
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