Let's talk about something more useful, about how we measure our business!
Wikipedia tells us:"Return on investment is one way of considering profits in relation to capital invested".
The ROI is defined as Profits / total capital employed.
So the ROI provides a rate of how investments bear interest.
For example, if a person needs $2000 to build a computer and sell it for 3000$, and he just wants to do this one computer, the ROI would be: ($3000 (revenue) - $2000 (cost) ) / $2000(cost) = 0.5 = 50%.
How cool is that?
Do you want to know more? Make a comment, I had lots of classes about using and interpreting this and other values ;)
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