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How to calculate ROI and use it to make better business decisions

The article from MSN Money discusses how to calculate Return on Investment (ROI) and its importance in making informed business decisions. ROI is a performance measure used to evaluate the efficiency or profitability of an investment or compare the efficiency of several different investments. The basic formula for ROI is (Net Profit / Cost of Investment) * 100, which gives the percentage return. The article explains that ROI isn't just about financial returns; it can also measure the effectiveness of marketing campaigns, time investments, or any project where resources are expended. It highlights the necessity of considering all costs, including hidden or indirect costs, and all returns, not just immediate financial gains. Additionally, the piece touches on the limitations of ROI, such as its inability to account for the time value of money or risk, suggesting that while ROI is a useful metric, it should be used in conjunction with other financial analysis tools for a comprehensive decision-making process. The article also provides examples of how ROI can be applied in different business scenarios, emphasizing its role in strategic planning and performance evaluation.

Read the Full MSN Article at:
[ https://www.msn.com/en-us/money/economy/how-to-calculate-roi-and-use-it-to-make-better-business-decisions/ar-AA1z4XpK ]