ROI is an important thing to see if an investment is worth it. It is often expressed as a percentage.

How do you calculate that? It's simple:

ROI = (What we earn - What we spend) / What we spend x 100%

Buy a stock for €100, sell it for €130. Bam! 30% ROI.

It applies everywhere. In the stock market, for example. Or in advertising.

There is also the annualized ROI. A bit more complicated, but useful for comparing investments over different durations.

Other indicators exist. ROA, ROE... Everyone has their own thing.

To improve ROI, it seems that one can play with profits or costs. More risk, more ROI. Finally, in theory.

Be careful anyway. The ROI has its limits. It doesn't tell everything. It can even be misleading sometimes.

In short, it's a handy tool. But you shouldn't rely on it blindly. Other factors come into play; it's not always clear.

Investors should keep this in mind. ROI is good. But it's not everything.