Calculate the ROI of your Credit and Security
Michael Hughes- Return on investment (ROI) is a popular way to measure the performance of an investment.
- It is also used to compare the efficiency of different investments.
- Credit, asset, and liability management are examples of investments that are often evaluated for ROI.
Return on investment (ROI) is a popular way to measure the performance of an investment. It is also used to compare the efficiency of different investments. Credit, asset, and liability management are examples of investments that are often evaluated for ROI. Companies may calculate ROI by subtracting the cost of an investment from the return that investment generates.
Different Ways to Calculate ROI
Net Profit Margin: Net profit divided by net sales.
Return on Assets (ROA): Net profit divided by total assets.
Return on Equity (ROE): Net profit divided by stockholders' equity.
Return on Investment (ROI, IRR): Net profit divided by initial investment.
Credit ROI
Calculate the ROI of your credit line with the formula below:
ROI = ((Total Credit Available) - (Total Credit Used)) / (Total Credit Available)
Credit available = credit lines you have open
Total credit used = total amount of credit used
Total credit available = total amount of credit available
Security ROI
Calculate the ROI of your security with the formula below:
ROI = ((Current Sale Price) - (Current Cost)) / (Current Sale Price)
Current cost = cost of the securities you own
Current sale price = current value of the security
Total cost = total cost of the securities you own
Security ROI
This is an estimate of the security's return when purchased.
Security Return %
This is the percent return of the security when purchased.
Security Annualized Return %
This percentage is the total return of the security, including dividends, divided by the original price.
Credit ROI
This is an estimate of the credit's return when purchased.
Credit Return %
This is the percent return of the credit when purchased.
Credit Annualized Return %
This percentage is the total return of the credit, including dividends, divided by the original price.
Return on Total Capital
The total return of all investments in the portfolio, including capital, dividends, and interest. The sum of all returns, divided by the sum of all costs.
Return on Net Worth
The total return of all investments in the portfolio, including capital, dividends, and interest. The sum of all returns, divided by the sum of all net worth.
ROI on Net Worth
The return of all investments in the portfolio, including capital, dividends, and interest, divided by the net worth of the portfolio.
ROI on Capital
The return of all investments in the portfolio, including capital, dividends, and interest, divided by the capital invested in the portfolio.
ROI on Dividends
The return of all investments in the portfolio, including capital, dividends, and interest, divided by the dividends paid by all securities held by portfolio.
ROI on Interest
The return of all investments in the portfolio, including capital, dividends, and interest, divided by the interest paid by all securities held by portfolio.
ROI on Total Investment
The return of all investments in the portfolio, including capital, dividends, and interest, divided by the total investment in the portfolio.
ROI vs. IRR
The return on investment (ROI) is a calculation that tells you how much you made or lost over a specific time period. An investment's ROI can be calculated in one of three different ways:
The internal rate of return (IRR), which tells you exactly how much your total return would be if you invested your money at that rate of return.
The payback period, which tells you how long it will take you to recoup the total amount of money you invested in that investment.
Present value, which tells you the present value of your investment.
ROI vs. ROE
Return on Investment (ROI) and Return on Equity (ROE) are two similar-looking financial metrics.
Both can capture the success of an investment by calculating the amount earned on an investment, minus other expenses.
ROI and ROE can be calculated for an investment by subtracting the cost of an investment from the amount earned, multiplied by 100.
