how do you calculate return on investment roi 
return on investment roi is calculated by dividing the profit earned on an investment by the cost of that investment for instance an investment with a profit of 100 and a cost of 100 would have an roi of 1 or 100 when expressed as a percentage although roi is a quick and easy way to estimate the success of an investment it has some serious limitations roi fails to reflect the time value of money for instance and it can be difficult to meaningfully compare rois because some investments will take longer to generate a profit than others for this reason professional investors tend to use other metrics such as net present value npv or the internal rate of return irr 