Investment return, also known as return on investment (ROI), is a metric used to assess the profitability of an investment. It essentially measures how much gain or loss an investment generates compared to its initial cost.

Here’s a breakdown of key points about investment return:

**What it is:**

- A ratio that compares the profit or loss of an investment to its initial cost.
- Expressed as a percentage.

**How to calculate it:**

- A common formula is ROI = (Net Profit / Cost of Investment) x 100.
- Net profit is the difference between the investment’s final value and its initial cost.

**What it tells you:**

- A positive ROI indicates a gain, while a negative ROI indicates a loss.
- A higher ROI generally suggests a better performing investment.

**Limitations:**

- Doesn’t consider the time factor, making it difficult to compare investments with different holding periods.
- Doesn’t account for factors like inflation or risk.

**Usefulness:**

- Helps evaluate the performance of individual investments.
- Enables basic comparisons between different investments, but consider limitations before making investment decisions solely based on ROI.