Calculating ROI . To calculate the return on investment, I use the formula: ROI = (net profit / total costs) × 100. This figure should be high enough to compensate for the costs and risks associated with the project, as well as provide a significant profit.
Different industries and companies may have their own standards and expectations, but in general, it is customary to highlight the following ROI:
Minimum. Usually the minimum acceptable ROI is around 20-30%. This means that the project should bring at least 20-30% profit on the invested funds to be considered successful.
Targeted. For projects that involve high risk or require significant investment, the target ROI may be higher. For example, 50% or more.
Industry norm. In some industries (IT, finance), investors can expect ROIs of several hundred percent, given the high level of uncertainty and potential for significant growth.
To confidently say that a project is successful, the ROI must exceed the threshold set by the company and provide a significant profit taking into account all risks and alternative investment options.
Example : Implementing a new CRM system in a uganda telegram company may require an investment of RUB 5 million, including licensing fees, training, and integration. The system is expected to increase sales by RUB 10 million in the first year due to improved analytics and sales automation.
Total costs. License fees of 3 million rubles, personnel training - 1 million, system integration - 1 million. Total: 5 million rubles.
Expected profit. Sales are expected to increase by 10 million rubles.
Net profit. Net profit = expected profit minus total costs. Net profit = 10 million rubles minus 5 million rubles = 5 million rubles.
ROI calculation. ROI = (5 million rubles / 5 million rubles) × 100 = 100%.
The implementation of a new CRM system will result in an ROI of 100%, which is a very good indicator and indicates a high level of success of the project.
Calculations by stages
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sadiksojib35
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