Don't overlook the diverse outcomes that can be gained from your investments

[hasnasadna]

Since the budget and sales for each business vary depending on the scale of the business, it is difficult to judge whether a business is going well or not just by looking at the amount of investment or sales. However, ROI can express the profit from the investment as a percentage, so businesses of different scales can be compared using the same rules.

As a very simple example, let's say there is a business that invests 10 million yen and makes a profit of 20 million yen, and another business that invests 1 million yen and makes a profit of 5 million yen. If you look at sales alone, the 20 million yen is larger, but it requires a larger investment.

In terms of investment efficiency, it is much more uk telegram phone number list efficient to make 5 million yen in sales for an investment of 1 million yen. Even with a more complicated balance between investment and sales, ROI can easily calculate the cost-effectiveness of businesses of different scales. Because "efficiency" can be expressed in numerical terms, it becomes possible to choose businesses that should be leveraged.

Also check out this article

How to measure the cost-effectiveness of owned media | Tips for increasing effectiveness
How to calculate ROI
Basic ROI calculations aren't that difficult, as we'll explain below.

However, to measure ROI properly, it is not as easy as it sounds, because you need to consider in detail the impact of advertising on sales. In this article, we will introduce how to calculate overall ROI as a reference.

How to calculate overall ROI
ROI is calculated as the profit divided by the investment expressed as a percentage.

Profit is calculated by subtracting cost of goods sold, selling and administrative expenses such as labor costs, and investment from sales. Marketing investment refers to the cost of various marketing measures implemented to promote product sales.