Core ROI formula
A simple ROI compares net gain with the original investment: ROI = (final gain − investment) ÷ investment × 100.
Why timing matters
A 30% return earned in three months is not directly equivalent to a 30% return earned in five years. The simple ROI formula does not normalize for time.
Include the costs that matter
Campaign fees, financing costs, labor, implementation time, maintenance, and taxes can materially change the return. Use a consistent cost definition when comparing alternatives.
Use ROI as one input
ROI is useful for screening and comparison, but cash flow timing, risk, strategic value, and opportunity cost can change the decision even when two projects show similar ROI.