Return on Investment: What is ROI analysis?
Return on Investment (ROI) analysis is one of several approaches to building a financial business case. The term means that decision makers evaluate the investment by comparing the magnitude and timing of expected gains to the investment costs.
Decision makers will also look for ways to improve ROI by reducing costs, increasing gains, or accelerating gains.
In the last few decades, this approach has been applied to asset purchase decisions (computer systems or a fleet of vehicles, for example), "go/no-go" decisions for programs of all kinds (including marketing programs, recruiting programs, and training programs), and to more traditional investment decisions (such as the management of stock portfolios or the use of venture capital).
The Simple Return on Investment >>
2 hour online self-study course from the leading authority on business case analysis. Learn the business terms and concepts you need to prepare for building or using the financial business case Learn how to develop and interpret ROI, NPV, IRR, and payback period - the most frequently used decision criteria in business today |
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