Return on Investment (ROI)

Expressed as a percentage, Return on Investment, or ROI, is a return metric that is calculated by dividing the net profit on an investment by the initial cost of that investment. For example, Sam buys an investment property for $100,000 and sells it a year later for $110,000. Sam's ROI would be the profits, or $10,000, divided by the initial purchase price, so $10,000 / $100,000 = 10% ROI.