Calculation formula of return on investment

Return on investment (ROI)= annual profit or average annual profit/total investment × 100%,

It refers to the economic return of an enterprise's investment in an investment operation activity, is a ratio used to measure the profitability of an enterprise, and is a comprehensive index to measure the operating effect and efficiency of an enterprise.

As can be seen from the formula, enterprises can improve the return on investment by "reducing sales costs, improving profit margins and improving asset utilization efficiency".

The advantage of return on investment (ROI) lies in its simple calculation. Return on investment (ROI) is usually time-sensitive-the return is usually based on a specific year.