Return on Investment (ROI) is the amount of profit you receive with respect to your invested capital. For example, a ROI of 10 percent means that for every dollar invested, you gained 10 cents. For businesses, the invested capital includes the net worth of the company, which includes total assets minus any liabilities. Both the net profit and net worth of the company are listed on the balance sheet.
1. Find the company's balance sheet and locate the net profits, before paying taxes, and the net worth.
2. Divide the net profit by the net worth. For example, if the net profit was $1 million, and the net worth was $10 million, the ROI would be 0.10 in decimal format.
3. Multiply by 100 to convert into percentage format. In the example, your ROI is 10 percent.
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