ROI: Return on Investment Explained

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Return on Investment (ROI) is a performance measure used to evaluate the returns of an investment or to compare efficiency between different investments. ROI measures the return of an investment relative to the cost of the investment.

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At 3:35 why can’t the ROI just be calculated by dividing the ROI by the amount of years? I.e. 20% over 3 years in comparison to 10% in one year, just divide 20% by 3 right?

greenshirtivn
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I got 58% from your annualized ROI equation. The cubed root of .20 is 58% if I'm not mistaken. Did I misinterpret your equation? Thanks :)

andrewschaeffer
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What is the relationship between ROI and EPS

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