What is ROI?
ROI, or return on investment, is a broad term that is used in many different industries. In general, ROI refers to the amount of benefit a company or individual sees as a result of a capital investment. The benefit can be actual or perceived, and while it is often measured in profit or revenue, ROI is also applied to more subjective goals such as brand awareness or corporate reputation. In online advertising, ROI is often determined by site hits and the click-through rate of a particular online ad.
Return on Investment is a financial concept for approximating the value of goods and services produced by an activity compared to the dollars invested in the activity. For a public library, the ROI is a way to answer the question, “What does the community get back for every dollar invested in the library?”. If the library tax dollars went into a black hole and no services were provided, there would be no return on investment. On the other hand, if the total of all tax dollars invested in the library produced an overall benefit to the community of twice the amount invested, the return on investment would be $2 of value for every $1 invested. In a subconscious way, the public may be aware that they pay for the library as part of their property tax and that, in return, they can use the library. They can attend programs, read newspapers, borrow books, dvds, audio books, etc. At another level, patrons may stop to realize that using the library means they can borrow items as an alternative t
ROI stands for Return on Investment. It is a financial ratio used to measure the financial return between competing investment alternatives. This is critical in an age of constrained resources. In general, a 100% return on the investment within the first year is considered outstanding. In the case of supply management, it should refer to the cost savings impact of the organization over the cost of the organization, e.g. $10 million savings with an organizational SG&A of $1 million equals a 10 to 1 or 1,000% ROI. A 100% ROI would be a $1 million savings.
ROI is Return On Investment. It may be positive or negative. When the investment grows within a specified period, the ROI is deemed to be positive. Conversely, if the value falls the ROI is deemed as negative. ROI is not static, but may vary, depending on when the investment is made and what the market conditions over the specified period.
