Return on investment, or ROI, is the most common profitability ratio. There are several ways to determine ROI, but the most frequently used method is to divide net profit by total assets. So if your net profit is $100,000 and your total assets are $300,000, your ROI would be .33 or 33 percent.
Return on investment isn't necessarily the same as profit. ROI deals with the money you invest in the company and the return you realize on that money based on the net profit of the business.
Profit, on the other hand, measures the performance of the business. You can measure the performance of your pricing policies, inventory investment, capital equipment investment, and so forth. Talk about an investment you made that did not return a return on your investment.
Also, according to your textbook, what are some basic methods to calculate ROI? Is there a way to make sure healthcare initiatives are aligned with ROI,
SOURCE: Return on Investment (ROI). (n.d.).