return on investment (ROI)

Related Terms
The earning power of assets measured as the ratio of the net income (profit less depreciation) to the average capital employed (or equity capital) in a company or project.

Expressed usually as a percentage, return on investment is a measure of profitability that indicates whether or not a company is using its resources in an efficient manner. For example, if the long-term return on investment of a company is lower than its cost-of-capital, then the company will be better off by liquidating its assets and depositing the proceeds in a bank. Also called rate of return, or yield.

Use 'return on investment (ROI)' in a Sentence

The return on investment was consistent year after year so we could not ignore those results so we promptly invested more in the company.
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We both wanted to have a store that everyone can shop at. That way we can purchase produce and it will not go to waste, that is a good return on investment.
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When thinking about if something will end up being profitable for your company you need to accurately break down the return on investment.
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