What is ROI?

Return on Investment (ROI) is a financial metric that measures how much profit or value you gain from an investment relative to its cost. It’s expressed as a percentage and helps businesses evaluate the efficiency and profitability of different investments.

The ROI Formula

Basic Formula

ROI = (Net Profit / Cost of Investment) × 100

Detailed Formula

ROI = [(Revenue from Investment - Cost of Investment) / Cost of Investment] × 100

Example

• Investment Cost: $50,000
• Revenue Generated: $75,000
• ROI = ($75,000 - $50,000) / $50,000 × 100 = 50% ROI

Why ROI Matters

Investment Comparison

Compare profitability of different opportunities to allocate resources wisely.

Performance Measurement

Evaluate whether investments are meeting expectations.

Decision Making

Determine if an investment is worth pursuing.

Accountability

Show stakeholders the value of spending decisions.

CFO Upgrade ROI

For software like CFO Upgrade:

Costs:

• Monthly subscription fee
• Implementation time
• Training

Benefits:

• Time saved on report generation
• Faster decision-making
• Reduced errors
• Better cash flow management
• Early problem detection

Typical ROI: Most customers see positive ROI within 2-3 months through time savings and better financial insights.