Return on Investment / ROI

Return is a commonly used rate of return. The ROI shows how much an investment has brought to the kitchen. Its value is usually given as a percentage.

ROI = (INVESTMENT INCOME – INVESTMENT COSTS) / INVESTMENT COSTS

ROI is one of the most important index that must be taken into account when planning an investment or an investment. 

In the business world, emotional factors cannot be excluded. A leader without visions often cannot be effective enough. Even so, the most important thing is that we can support the correctness of our decisions with numbers. Investments and investments are among the most important decisions. The main question for these is whether it is worth spending money on these goals? Will the invested capital be returned?

The effects of investments can be analyzed in a very complex way. Many reports and indicators can be used for this. Among them, the simplest index is ROI. It is a simple ratio that describes the relationship between the money invested and the revenue available through the investment. In other words, ROI shows how the amount of money earned through an investment compares to the amount of money spent on the investment. Its value is most often given as a percentage. 

Whether a given ROI value is favorable or not depends on the field in which our company operates. In the mill industry or in shipping, for example, the profit ratio is quite low, so even though there is a lot of money in the shops, the return on investment is slow. In show business and performing arts, the profit ratio is higher, but the return usually has to be managed from smaller revenues. 

Of course, there are investment whose return is difficult to quantify. Its results do not appear immediately and are not specifically related to the investment. Communication is typically like this, on which a lot of money can be spent without seeing its benefit. However, the opposite situation also occurs. A well-hit idea that costs next to nothing will bring a huge increase in revenue. It would be difficult to describe with specific numbers how much the advertisement and PR spending on this image brings in the life of a brand that considers itself trendy, relaxed, and youthful, but probably a lot. 

Therefore, it is difficult to quantify exactly how much the design, marketing, and communication that underpins this is worth. It is not easy to quantify the feeling of life that makes a big brand successful, increases its sales, and makes it possible to keep the price of products high. The totality of these is what can result in a higher return.