Return On Investment, or ROI, is a financial metric used to evaluate the efficiency of an investment. It measures the gain or loss generated relative to the amount invested. To calculate ROI, you subtract the initial investment cost from the final value of the investment, then divide that number by the initial investment cost. The result is often expressed as a percentage, making it easier to compare different investments. ROI helps investors and businesses make informed decisions by providing a clear picture of potential profitability. A higher ROI indicates a more profitable investment, while a lower ROI suggests less favorable returns. This metric is widely used in various fields, including finance, marketing, and project management.