The Basic Formula for ROI
The basic formula for calculating ROI is quite straightforward. You just subtract costs from benefits, divide that difference by costs, and then multiply the result by 100:
The term [benefits minus costs] represents the return on the project. The investment is the costs of the project or at least the up-front costs. You multiply by 100 simply to convert the results from a fraction to a percentage.
Say, for example, that you have a project that costs $200,000 but has benefits of $300,000. The return for such a project would be the benefits minus the costs, or $100,000. Dividing this number by costs ($200,000) yields ...
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