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ROI


Definition

Return on Investment. A measure of a corporation's profitability, equal to a fiscal year's income divided by common stock and preferred stock equity plus long-term debt. ROI measures how effectively the firm uses its capital to generate profit; the higher the ROI, the better.

Featured Tip

Reinvesting ProfitsRegarding reinvestment of profits, if you take out your profits early, that will free you from the risk that a stock can suddenly go up or down without warning. But reinvesting your profits can make y ... Read more


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