noun

ROI

AR-oh-EYE

ROI (noun) means a measure of how much money an investment has gained or lost compared with what it cost, normally written as a percentage of the original amount put in. Example: “The shop refit cost £40,000 and brought in £50,000 of extra profit, an ROI of 25%.”

noun

business A measure of how much money an investment has gained or lost compared with what it cost, normally written as a percentage of the original amount put in.

"The shop refit cost £40,000 and brought in £50,000 of extra profit, an ROI of 25%."

"She wanted to see the ROI on last year's advertising before agreeing to another campaign."

informal, business More loosely, whatever is gained in exchange for any effort, time or money spent, even where no money is measured.

"Three days of training for one new client is a poor ROI on my time."

How to Use ROI

Learner’s notes

In plain EnglishHow much you got back compared with what you put in.

When to use it

Standard in business, marketing and finance writing; the spelled-out form return on investment is more usual in formal reports.

Memory tip

Say the three letters separately: R-O-I. It takes a singular verb — the ROI was disappointing.

Trace the full origin ↓

Easily confused with

ROE (return on equity) ROAS (return on ad spend) APY profit margin

Common pairings

measure ROI strong ROI negative ROI ROI on ad spend calculate the ROI

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Fill the Gap

Can you complete this real example?

The shop refit cost £40,000 and brought in £50,000 of extra profit, an _____ of 25%.

Etymology

An initialism of return on investment.

Origin: English

Synonyms

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return on investment return yield rate of return payback payoff benefit reward

Antonyms

loss

Related Words

going take death return issue value fall increase

Rhymes for ROI

oi JOI moi poi koi Boi Aoi Toi Troi Choi Hanoi Yayoi

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Frequently Asked Questions

How is ROI calculated?

In its simplest form, ROI is the gain or loss from an investment divided by the amount originally invested, then expressed as a percentage. An investment of 1,000 that returns 1,150 has produced a gain of 150, or an ROI of 15%. The basic formula ignores how long the money was tied up, which is why longer projects are often compared using annualised figures instead.

What is the difference between ROI and profit?

Profit is an amount of money — what is left after costs. ROI is a ratio that puts that profit in proportion to the sum invested to produce it. A 5,000 profit is large from a 10,000 investment and small from a 500,000 one, and only ROI shows the difference.

Is a high ROI always better than a low one?

A higher percentage means more was returned per unit invested, but the figure on its own leaves out the size of the sum, the time taken and the risk involved. Two investments with the same ROI can behave very differently if one took a month and the other took ten years.

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