What does ROI stand for in financial metrics?

The correct choice, Return on Investment, is a fundamental financial metric used to evaluate the efficiency or profitability of an investment. ROI measures the gain or loss generated relative to the amount of money invested. This calculation is crucial for investors and businesses as it helps in assessing the value derived from various investment options compared to their costs.

ROI is typically expressed as a percentage, calculated by dividing the net profit from an investment by the initial investment cost and multiplying by 100. This metric provides clear insights into how well an investment is performing and aids in making informed financial decisions.

In the context of financial metrics, the other options do not accurately represent the widely recognized acronym ROI. Rate of Income and Revenue on Investment do not reflect standard financial terminology. Similarly, Return on Interest is a misleading term as interest typically refers to the cost of borrowing or the earnings from bank deposits, rather than a direct measure of investment returns. Understanding the correct definition of ROI is essential for effective financial planning and management, making it a key focus for individuals and businesses alike.