Return on Investment (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. ROI is typically expressed as a percentage, calculated by dividing the net profit from the investment by the initial cost, then multiplying by 100. Investors and businesses use ROI to compare the profitability of different investments or projects. A higher ROI indicates a more profitable investment, while a lower ROI suggests less efficiency. Understanding ROI helps individuals and organizations make informed financial decisions regarding their resources and strategies.