What is King? The formula for calculating roI is one of the issues studied by businessmen due to the significant benefits it brings to business activities.seeis one of the marketing campaigns used to determine the net ratio of total investment costs. Thanks to Roi, investors will be able to assess the effectiveness of the campaign. Blog Tran Phu We will help you better understand this problem through the following article!
What is King? The King’s Calculation Formula
What is King?
Roi (return on investment) is considered to be the performance result that return on investment brings to the cost of your investment and is the ratio of the net profit to the total cost of the investment.
Moreover, Roi makes your business goals more useful because they are measurable, referring to a specific problem. Roi can perform monetary cost analysis and calculate the whip as an investment using time.
The King’s Calculation Formula
The most common and widely used formula for calculating Roi is:
“ROI = Net Income / Cost of Investment or ROI = Return on Investment / Basis of Investment”
The King’s Calculation Formula
For example: When an investor earns $10,000 on $1,000, the rate of return (KING) will be 0.9 or 90%.
The company invests $90 in a business model and spends another $10 on joint venture research. The total cost of the investment business is $100. If this joint venture generates $400 in revenue but has $100 in personnel and administration expenses, the net profit would be $300.
Using the formula to calculate ROI, $300 divided by $100 equals 3.
The ROI of this investment is therefore 3 times 100 or 300%. (converted to percentage)
The formula to calculate the whip in Marketing
The most common formula for calculating RO in marketing at the simplest level that investors often use is:
“(Benefit – Cost) / Cost = Marketing ROI”
For example: A company A type investor
The property has a value of 3,000,000 USD. After 3 years, the investor sold for 3,320,000 USD. As a result, after three years, A has increased by $320,000.
Return on investment: (3,320,000 – 3,000,000)/3,000,000 USD = 0.083
How to effectively improve the Roi index in Marketing?
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Know how to allocate the budget appropriately.
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Invest more with highly effective campaigns.
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There must be a budget to deal with the necessary situations.
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Test before launching a campaign.
Advantages and disadvantages of using the Roi indicator.
When using the Roi indicator, you need to know the pros and cons in order to better understand and use the Roi indicator correctly.
Advantage:
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The data provided is relative, easy to calculate, easy to understand, easy to calculate.
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Evaluate the company’s financial performance, helping the company move in the right direction.
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Bring positive results by investing in the short term.
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Be clear and precise in determining investment costs
The Roi index brings great advantages to investors, but it still has disadvantages that everyone should be aware of.
Default:
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The Roi indicator is not intended for long term use.
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Roi cannot be calculated to make investment decisions.
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When a risk arises, the ROI ratio cannot be adjusted.
Thanks to recent comments, Blog Tran Phu I hope investors will understand better What is King? The King’s Calculation Formula to help business investment grow. Thank you for your interest!