roi-calculation

Vocabulary Word

Definition

ROI calculation is a financial metric that’s widely used to measure the probability of gaining a return from an investment. It measures the gain or loss made on an investment relative to the amount of money invested.

Examples in Different Contexts

In marketing strategy, 'ROI calculation' assesses the effectiveness of marketing campaigns by comparing the increase in sales to the cost of the campaigns. A marketing director might discuss, 'By using ROI calculation, we can identify which marketing channels are most efficient in terms of cost versus sales increase.'

Practice Scenarios

Marketing

Scenario:

The recent ad campaign has been quite successful, and visibility has increased. We should evaluate to understand the exact financial impact.

Response:

Certainly, a detailed ROI calculation will give us a clear perspective on the ad campaign's fiscal performance.

Tech

Scenario:

The software upgrade will undoubtedly improve productivity, but we need to consider if the cost is worth it.

Response:

Agreed. Let's do an ROI calculation to decide whether it will be a cost-effective move.