Certainly! The Return on Investment (ROI) formula is used to calculate the return you receive on an investment relative to the cost of that investment. Here’s the ROI formula:

ROI = [(Net Gain from Investment) / (Investment Cost)] x 100

Net Gain from Investment: This is the total benefits or returns you receive from the investment minus the total costs associated with the investment.

Investment Cost: This includes all the costs associated with the investment, including initial purchase or implementation costs, ongoing maintenance, and any other related expenses.

The result is typically expressed as a percentage, which represents the ROI as a percentage of the investment cost.

Here’s an example to illustrate how to calculate ROI:

Suppose you invest $10,000 in a new technology system for your business. Over the course of a year, the technology system generates $15,000 in additional revenue and leads to cost savings of $2,000 due to increased efficiency. However, there are ongoing maintenance costs of $1,500.

Using the ROI formula:

ROI = [(($15,000 + $2,000) – $1,500) / $10,000] x 100

ROI = ($15,500 – $1,500) / $10,000 x 100

ROI = $14,000 / $10,000 x 100

ROI = 140%

In this example, the ROI for the technology investment is 140%, indicating that for every dollar invested, you’ve received a return of $1.40.