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25 Need-To-Know Key Performance Indicators by Bernard Marr

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Chapter 11

Return on investment (ROI)

  • Why: To better understand your financial performance, especially the efficiency of investments
  • What: To measure the proportion of revenue that is left after removing all costs of operating the business
  • When: When you want to assess or compare the efficiency of investments
  • The question this indicator helps you to answer: to what extent are our investments generating a financial return?

Why does this KPI matter?

Return on investment (ROI), also referred to as the rate of return or rate of profit, is a financial performance measure that is used to evaluate the efficiency of an investment (after or during the investment period) or to compare the efficiency of a number of different investments (before capital ...

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