ROI, or return on investment, is a ratio or percentage figure that measures the profitability or effectiveness of a certain business or investment. It is an easy-to-use tool that may produce either an absolute ratio (such as 0.35), or a percentage value (such as 35%). As a result, ROI can be utilized to compare various investment strategies or trading operations. ROI specifically assesses the investment's return in relation to its cost of acquisition. Moreover, the ROI is simply calculated as the return (net profit) divided by the sum of the acquisition expenditures (net cost). The percentage value can then be obtained by multiplying the result by 100. Naturally, a high ROI figure denotes a successful investment, whereas a low ROI denotes a return that was insufficient to cover the costs. ROI is calculated using the following equation: ROI = (Current Value - Total Cost) / Total Cost. It can alternatively be stated as: ROI = Net Profit / Net Cost.