One of the efficiency metrics of Financial Investment defined as ratio of Cash Return over amount of Initial Investment:
\rm ROI = \frac{Cash \ Return − Cost \ of \ Investment}{Initial \ Investment} |
where
\rm Cost \ of \ Investment | consist of \rm Initial \ Investment and al types of additional expenses to facilitate Cash Return |
ROI is normally presented in percentage (120%, 300%, ...).
Alternatively it can be presented as multiplier of Initial Investment:
1X | Cash Return are equal to Initial Investment |
---|---|
2X | Cash Return are twice higher than Initial Investment |
3X | Cash Return are three times higher than Initial Investment |
... | ... |
See also
Economics / Investment / Financial Investment / Financial Investment Metrics