Financial Terms Glossary

ROI - Return On Investment

Formal

A general term used in investment appraisal to describe a family of measures for comparing the original cost of an investment against the benefits, and the timing of these benefits, resulting from it. Eg Payback, ROI, NPV and Discounted Cash Flow Analysis.

Informal

The classic question. 'What's in it for me?' Before you commit your hard earned money to an investment, company or friend – you may ask yourself what profit or return I would get if the project were a success. Take this return, and compare it to the cost – and think about it in a hundred different ways. A generic term for many measures of investment return.

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