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 Terms Beginning with R

# Return On Investments ROI

Fundamental Analysis Term

Return on Investment (ROI) is a financial metric used to measure the gain or loss generated on an investment relative to the initial cost of that investment. ROI is expressed as a percentage and is a key financial ratio used in fundamental analysis.

ROI provides investors with a way to evaluate the profitability of an investment and assess the potential risk associated with it. A higher ROI indicates that the investment is generating more profit per dollar invested, while a lower ROI indicates lower profitability. This information can be used to determine which investments are most attractive and make informed investment decisions.

The formula for calculating ROI is:

ROI = (Net Profit / Cost of Investment) x 100%

Where Net Profit is calculated as the revenue earned from the investment minus the costs associated with it. The cost of the investment is typically the initial purchase price.

ROI can be used in fundamental analysis to evaluate the performance of a company, industry, or portfolio of investments. By calculating the ROI of various investments, investors can identify which ones are providing the highest returns and adjust their investment strategy accordingly. It can also be used to compare the performance of different companies within the same industry or sector.

In summary, ROI is a financial metric used to measure the profitability of an investment and is a key ratio in fundamental analysis. The formula for calculating ROI is (Net Profit / Cost of Investment) x 100%.

# Return On Investments ROI

Fundamental Analysis Term

Return on Investment (ROI) is a financial metric used to measure the gain or loss generated on an investment relative to the initial cost of that investment. ROI is expressed as a percentage and is a key financial ratio used in fundamental analysis.

ROI provides investors with a way to evaluate the profitability of an investment and assess the potential risk associated with it. A higher ROI indicates that the investment is generating more profit per dollar invested, while a lower ROI indicates lower profitability. This information can be used to determine which investments are most attractive and make informed investment decisions.

The formula for calculating ROI is:

ROI = (Net Profit / Cost of Investment) x 100%

Where Net Profit is calculated as the revenue earned from the investment minus the costs associated with it. The cost of the investment is typically the initial purchase price.

ROI can be used in fundamental analysis to evaluate the performance of a company, industry, or portfolio of investments. By calculating the ROI of various investments, investors can identify which ones are providing the highest returns and adjust their investment strategy accordingly. It can also be used to compare the performance of different companies within the same industry or sector.

In summary, ROI is a financial metric used to measure the profitability of an investment and is a key ratio in fundamental analysis. The formula for calculating ROI is (Net Profit / Cost of Investment) x 100%.

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