A common measure of the profitability and effectiveness of an investment. The method for determining the ROI is:
Profit after Expenses / Total Investment = Return on Investment
So, if you invested $10,000 in an advertising campaign that generated a net profit (profit after expenses) of $2500, your return on investment would be:
$2500 / $10,000 = .25 or 25% ROI
To accurately determine ROI all campaign expenses (salaries, taxes, etc.) must be considered when determining net profit.