In financial analysis, what does the acronym ROI stand for?

The abbreviation ROI stands for "Return on Investment," which is a key financial metric used to evaluate the efficiency or profitability of an investment. It measures the amount of return or profit relative to the investment cost. ROI is typically expressed as a percentage and calculated using the formula:

ROI = (Net Profit / Cost of Investment) x 100.

This metric helps investors and analysts determine how much they gain or lose from their investments and allows for the comparison of the profitability of different investments. Understanding ROI is essential for making informed financial decisions, as it provides insight into the effectiveness of capital allocation and business strategies. In contrast, the other terms listed do not reflect the widely accepted measure of profitability and investment returns that ROI signifies.