Difference between revisions of "Return on investment"
| Line 13: | Line 13: | ||
According to [[Managerial Accounting by Braun, Tietz (5th edition)]], | According to [[Managerial Accounting by Braun, Tietz (5th edition)]], | ||
| − | [[Return on investment]] ([[ROI]]) is operating income divided by total assets. The ROI measures the profitability of a division relative to the size of its assets. | + | :[[Return on investment]] ([[ROI]]) is operating income divided by total assets. The ROI measures the profitability of a division relative to the size of its assets. |
Revision as of 18:46, 16 July 2020
Return on investment (also well known by its acronym, ROI; hereinafter, ROI) is the ration that is used to evaluate the efficiency of an investment in finance and economics.
Definitions
According to Juran's Quality Handbook by Defeo (7th edition),
- Return on investment (ROI). The ratio of the estimated gain to the estimated resources needed.
According to the BABOK Guide (3rd edition),
- Return on investment (ROI, business analysis). A measure of the profitability of a project or investment.
According to Cost Accounting by Horngren, Datar, Rajan (14th edition),
- Return on investment (ROI). An accounting measure of income divided by an accounting measure of investment. See also accrual accounting rate of return method.
According to Managerial Accounting by Braun, Tietz (5th edition),
- Return on investment (ROI) is operating income divided by total assets. The ROI measures the profitability of a division relative to the size of its assets.
