What is a Return on Investment (ROI)?
ROI expresses net benefit as a percentage of cost: what did each invested dollar give back? It's the most widely understood selection metric in business — and the bluntest, since the basic form ignores timing entirely.
A 40% ROI over one year and a 40% ROI over six years are wildly different investments wearing the same number. That's why serious comparisons pair ROI with NPV or IRR.
Formula
ROI = (net benefit − cost) ÷ cost × 100%
Worked example
A $200K CRM rollout yields $290K in added margin over two years: ROI = ($290K − $200K) ÷ $200K = 45%. Clean headline for the board deck — while the finance team, rightly, checks the NPV before committing, because "over two years" is doing quiet work in that sentence.