ROI

ROI stands for Return on Investment and is a metric that measures how much profit or loss an investment produces relative to its cost. It is commonly calculated as (gain − investment) / investment and expressed as a percentage, which makes different projects comparable. ROI is useful for decision-making because it quickly indicates whether a project is profitable, but it does not account for the time value of money, risk, or additional recurring costs such as operating expenses.

Suppose your team invests €50,000 in developing a mobile app and the app generates €80,000 in additional revenue in the first year directly attributable to that investment. The net gain is €30,000, so the ROI is €30,000 / €50,000 = 0.6 or 60%. This indicates that for every euro invested, €0.60 of net return was achieved. Note this example does not consider ongoing maintenance costs or future cash flows; for long-term decisions you might also evaluate NPV or IRR.