ROI is a coefficient used to determine

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the return on investment in a business. It helps to identify both the most profitable investments and those in which the costs were higher than the profit received from them. The metric is used in various areas, most often it is used for the general assessment of a business, as well as in marketing, advertising, SEO, real estate transactions, etc.
ROI is necessary to identify promising areas and projects, the financing of which brings income to the company, and allows you to avoid unnecessary expenses. What indicators make up the coefficient and how to calculate the ROI metric, we will tell you in simple terms in the article.

ROI Calculation Formula
The ratio is the ratio of the amount of profit (if the business suffers losses, then the amount of losses) to the amount of all investments and is measured as a percentage:

ROI = ((profit - investment) / investment) x 100%

Before calculating the ROI, it is necessary to define what we mean by income and investment, as well as the rules for calculating the metric. Let's consider the basic concepts and principles of ROI using the example of an online store.

We explain what ROI is in simple terms.
To obtain reliable data, it is important to correctly formulate the purpose bangladesh whatsapp number database of calculating the coefficient. If we want to evaluate the efficiency of a business, then we will include all costs for the creation, placement and promotion of a website and services in the concept of investments:

purchase of a domain name;
hosting services;
salaries for all employees;
costs for SEO, SMM, marketing;
purchasing software licenses, etc.
In this case, profit is the money earned not only from selling goods, but also from placing other people's advertisements, paid subscriptions, etc.

We show the formula for calculating ROI.
If the effectiveness of an advertising campaign is to be assessed when promoting a new product, then it is necessary to take into account the costs and profits during the PR campaign. In this case, we exclude investments in other products from the calculations, and by income we mean the proceeds from the sale of a specific product. The ROI formula will be changed:

ROI = ((profit over time - investment over time) / investment over time) x 100%

Calculation results
How to determine the level of income (or loss):

An online store is profitable if its ROI is greater than 100%.
The company's expenses exceed the amount of profit received when the ROI does not reach 100%. This indicator serves as a signal that it is necessary to change the project development strategy.
If the ROI is 100%, then the web resource does not generate income, but the costs for it pay off.