Return on investment (ROI) is a metric used to understand the profitability of an investment. ROI compares how much you paid for an investment to how much you earned to evaluate its efficiency ...

Investors use the return on assets ratio formula to evaluate a company. The greater a return, the higher valuation investors are likely to provide.

Learn how to calculate ROI (Return on Investment) and use it to evaluate the profitability of your investments. Discover the ROI formula and practical examples.

Most investors would view an average annual rate of return of 10% or more as a good ROI for long-term investments in the stock market. However, keep in mind that this is an average.

The definition of a good risk-adjusted return ratio can vary depending on your investment objectives and risk tolerance. However, when looking at the Sharpe ratio specifically, a ratio above 1 is ...

The Bottom Line . The Sharpe ratio, named after its creator, William F. Sharpe, is a mathematical expression that helps investors compare the return of an investment with its risk.

To calculate the return on her investment, she would divide her profits ($1,200 – $1,000 = $200) by the investment cost ($1,000) for an ROI of $200/$1,000, or 20%.