Return on investment is the financial benefit gained from buying an asset. This can mean either a positive or negative return depending on the asset and market conditions. As a formula, this is expressed as net profits divided by total investment times a hundred.
For example…
Nelly bought some shares in the toy manufacturer Mattel last year at a cost of forty-five dollars a share. On the one year anniversary of this purchase, Nelly looks at the cost of the share at present, which is fifty dollars a share. So, her ROI for this investment is and calculates her return on investment is a healthy eleven percent.
