hi this is Mike from MikeTurco.com. I’m going to explain how to calculate ROI. This is a really easy presentation to follow but it doesn’t pretty quickly, so be sure to pick up a copy our The ROI Workbook at MikeTurco.com/ROI. ROI, or Return on Investment tells you how much money your money has earned. And here is the ROI formula it’s really easy to use. ROI equals net profit divided by your investment times 100 and is expressed as a percentage an ROI of 0 percent is your break even point.
If you buy something for dollar and sell it for a dollar, your ROI is zero percent An ROI of 100 percent means that you doubled your money. if you buy something for dollar and sell it for two your ROI is 100 percent here’s a good example. Let’s say you bought a used car for twelve hundred dollars and sold that car for eighteen hundred. Your net profit 600 bucks. So what was your return on investment? well your profit was six hundred dollars and your investment was twelve hundred dollars so when you put those numbers into the formula you see that your ROI was fifty percent. That means you got all your money back plus 50 percent more.
Here’s another example: Let’s say you invested two thousand dollars on the stock market and then sold your stocks a year later for 1200. That means your net profit was a minus six hundred dollars so what is your return on investment? When you plug your numbers into the formula you see that you return on investment was a negative 30 percent. In other words you lost 30 percent of your investment if you have any questions regarding ROI feel free to call or email or visit my website at MikeTurco.com..
Read More: What is Return On Investment – ROI?