What is Return on Investment (ROI)

ROI is a ratio or percentage indicator that quantifies the proportion of achieved gains with respect to the investment costs. It is a profitability indicator that could be used by investors as a quick means to measure the relative success of their investment, by comparing it for example to other investments or a certain benchmark. A higher ROI means that greater profits were achieved. One drawback of using ROI is that it does not consider the time it takes to achieve profits.