Return On Investment (ROI) - Simplest explanation ever

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Return On Investment (ROI) is a term very commonly used to gauge the effectiveness or Impact of any intervention in the world of business. This video attempts to provide a basic overview of the term and clarify it with some examples.
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Опубликовано:

25 ноя 2015

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Комментарии : 17

@aviera7890 5 лет назад

In the first example, the profit is not 500. It is zero (500-500) the ROI is 0%, not 100%.. The net profit is the current value of investment minus the cost of investment (500 minus 500)

@eddieblandiv8387 7 лет назад

Can you do a tutorial on How to isolate the effects/Calculate full costs?

@MisterSimplify 7 лет назад

Hi Eddie. Thanks for the Feedback. Yes I shall get on it asap. Had lost access to the account unfortunately.

@albertgan2378 7 лет назад

why do you need to subtract the 30000 by 10000 which is the previous sale?

@MisterSimplify 7 лет назад

Hi Albert. The intent in that example is to find out the Impact of the training course. It is assumed that the training course has resulted in an increase in sales from 10K to 30K. Therefore, we use this difference in our ROI calculation. Cheers!

@rado6616 7 лет назад

the net profit is 500 when you sell a car for for its same value?

@MisterSimplify 7 лет назад

Hello! No the profit will depend on what you bought the item for.

@rado6616 7 лет назад

HI! so I think that if we bought an item at 500 then sold it at 500(the same value), the profit I get is 0???so the ROI is 0%?

@MisterSimplify 7 лет назад

The way this ROI formula looks at this is that having sold the item for 500, your profit is 500. But at the same time your initial investment (your cost) is 500 too. So the return on investment is 100%. Essentially, as long as you don't make a loss in your transaction, the ROI will always be 100% or higher. Hope this makes sense. Cheers!

@EasternField 7 лет назад

Answer this firstly maybe: If you bought the item for 500 and sold it for 500 as well, did you make any money? No you made 0 profit....

@MisterSimplify 7 лет назад

Right folks! I think this video needs to be simplified and corrected. I accept your feedback and will remake this to simplify things and correct them. The professor who provided input to this video also highlighted the same. So I apologise for this and commit to remake this video. Hope that helps.

@AnnaFed015 3 года назад

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@AnnaFed015 3 года назад

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@AnnaFed015 3 года назад

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