Definition
Return on Investment (ROI) is a metric expressing the relationship between the benefits achieved and the costs incurred for an investment.
Human Explanation
ROI indicates whether an investment delivered the expected value.
Why it Matters
It helps compare investments and assess their efficiency.
Conceptual Boundary
ROI is only one measure of an investment. It does not capture every factor, including time, risk or intangible benefits.
Practical Perspective
Interpret ROI together with risk, the payback period and the organisation’s strategic objectives.