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What does ROI stand for in financial analysis?

Return on investment

ROI stands for Return on Investment, which is a key financial metric used to evaluate the profitability and efficiency of an investment. It measures the gain or loss generated relative to the amount invested. Calculating ROI provides investors and businesses with insights into the effectiveness of their investments, allowing them to compare different investment opportunities and make informed decisions based on past performance and future projections. By expressing ROI as a percentage, it becomes easier to gauge the relative attractiveness of various investments and determine which ones yield the best return compared to their cost. This metric is widely used across various sectors, making it fundamental in financial analysis.

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Rate of investment

Revenue on inventory

Return of income

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