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Sample Essay on FINANCE: How to calculate the return on an investment (ROI) Research Paper
Example of Research Paper, Sample essay
Without calculating the return on an investment (ROI) is not possible to realize any marketing activity and be sure not to loose capital investments. It is essential for making one’s marketing activity more effective and uniquely productive. ROI can be expressed for different time periods: one year, one month, one week, one day. This makes it a necessary objective analyst of the marketing activity even for a long period. It also includes possible fees and expenses of the future financial project. When a person realizes an investment there is always a potential to increase the capital in several ways. There are a lot of formulas made to calculate ROI. Some of them are more detailed, some are less. It is obvious that the formula required depends on the type of investment and that ROI does not yield to formalization and cannot be entirely universal. Nevertheless, a general formula can be given:
The Return on an Investment (ROI) Calculation
ROI= Profit/ Total investment
Total investment - total investment, including all the possible fees and expenses connected with the investment. For example, if you bought $8700 worth of stock and your fees were $1300, then your total investment is $10,000 ($8700 + $1300).
Profit - profit or loss associated with the investment. For example if the $10,000 investment in stocks is worth $50,000 one year later, then the profit is $40,000 ($50,000-$10,000).
Therefore, ROI calculated by this formula will be:
ROI=40,000/ 10,000=4, or a 400% annual ROI (Just an example).
This formula is a base in calculating ROI and has a lot of minuses. For instance, is does not consider that it is also necessary to subtract the taxes from a return, possible stock devaluation and many more. In each case is very individual,

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