📈 Metrics

Return on investment (ROI)

How much you gained for every rupee you invested.

Formula

ROI = (Gain − Cost) ÷ Cost

ROI compares the gain from an investment to its cost, as a percentage.

It lets you compare very different options — a new store, a marketing campaign, a machine — on one scale.

🧮 Example

Spend ₹10 lakh on a campaign that brings ₹14 lakh of profit → ROI = 40%.

🎯 Interview tip

Always state the time period — 40% in 3 months is very different from 40% in 5 years.

Used in

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Payback period

How long until an investment earns back what it cost.

Net present value (NPV)

Future cash, translated into today's money.

Profit

What's left after you pay for everything.

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