Q. What do you mean by Return on investment?

Return on investment (ROI) -- a measure of efficiency and effectiveness with that managers use resources available to them, expressed as a percentage. Return on equity isgenerally net profit after taxes divided by shareholders' equity. Return on invested capital isgenerally net profit after taxes plus interest paid on long-term debt divided by equity plusthe long-term debt. Return on assets used is generally the operating profit divided by assetsused to produce the profit. Typically used to evaluate subsidiaries or divisions. ROI is veryuseful though can only be used to compare consistent entities -- similar companies in sameindustry or the same company over a period of time. Different industries and differentcompanies have different ROIs.