Return on Investment (ROI) is the amount of profit you receive with respect to your invested capital. For example, a ROI of 10 percent means that for every dollar invested, you gained 10 cents. For businesses, the invested capital includes the net worth of the company, which includes total assets minus any liabilities. Both the net profit and net worth of the company are listed on the balance sheet.
Find the company's balance sheet and locate the net profits, before paying taxes, and the net worth.
Divide the net profit by the net worth. For example, if the net profit was $1 million, and the net worth was $10 million, the ROI would be 0.10 in decimal format.
Multiply by 100 to convert into percentage format. In the example, your ROI is 10 percent.
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Writer Bio
C. Taylor embarked on a professional writing career in 2009 and frequently writes about technology, science, business, finance, martial arts and the great outdoors. He writes for both online and offline publications, including the Journal of Asian Martial Arts, Samsung, Radio Shack, Motley Fool, Chron, Synonym and more. He received a Master of Science degree in wildlife biology from Clemson University and a Bachelor of Arts in biological sciences at College of Charleston. He also holds minors in statistics, physics and visual arts.