The Return on Investment (ROI) is a financial metric that is used to evaluate and track the investments made in a project. The ROI analysis can be used to compare the magnitude and timing of investment gains can be compared directly with the magnitude and timing of investment costs.

A high ROI indicates that investment gains compare favorably to investment costs. The ROI is used as an indicator to check whether the organization received return for the money invested to date, and whether it is likely to earn returns for the money invested today and in the future.

Most forms of ROI analysis compare the investment returns and the costs by using a ratio, or percentage. In most ROI methods, an ROI ratio greater than 0.00 (or a percentage greater than 0%) means that the investment returns is more than its cost. For potential investment decisions, a higher ROI is considered to be the better business decision. A good investment analysis measures the probabilities of different ROI outcomes, and considers both the ROI magnitude and the risks that go with it before arriving at a decision.

The Return on Investment is the cost of the investment subtracted from the gain of the investment, divided by the cost of the investment. This formula takes the discounting factor into account. The formula is used for a standard investment analysis model, which has a value stream, Revenue (R), and two cost streams, Development Cost (D) and Maintenance Cost (M). To calculate the ROI from the start to finish of the project, use this formula.