Return on Investment (ROI)

1. Return on investment is a firm's net income divided by average invested capital. A company's percentage return relative to the level of its assets. ROI is an ideal performance measure for investment strategic business units (SBUs). ROI is expressed as the operating income of a business unit divided by the assets of that business unit.
2. Ratio that determines the basic return of an investment and is calculated by taking the investment sales price less the cost of investment divided by the cost of investment.