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eCommerce Return on Investment (ROI) Calculator
Useful
Why it's useful to use
The Return on Investment (ROI) calculator is a crucial tool for eCommerce entrepreneurs to measure the effectiveness of their investments. By calculating ROI, you can determine how much profit you’re generating for every dollar invested in your business. This metric is valuable for evaluating marketing campaigns, business strategies, and investments in products, ensuring you are making financially sound decisions that contribute to business growth and profitability.
Formula
How the tool works
The ROI formula is calculated by dividing total profit by total investment and then multiplying the result by 100 to get a percentage. The formula is:
ROI = (Total Profit / Total Investment) * 100
This percentage represents how much profit you earned for every dollar you invested. For example, if you invested $5,000 and earned a profit of $2,000, your ROI would be 40%. This means you made a 40% return on your investment, which indicates a profitable venture. A positive ROI indicates profitability, while a negative ROI suggests that adjustments may be needed in your investment strategy.
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