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, allowing investors to compare the profitability of different investments easily. 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 formula is: ROI = (Final Value - Initial Investment) / Initial Investment × 100. This helps investors make informed decisions about where to allocate their resources.