Return on investment (ROI) is the benefit to the investor resulting from an investment of some resource. A high ROI means the investment gains compare favorably to investment cost. As a performance measure, ROI is used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments. In purely economic terms, it is one way of considering profits in relation to capital invested.
In business, the purpose of the “return on investment” (ROI) metric is to measure, per period, rates of return on money invested in an economic entity in order to decide whether or not to undertake an investment. It is also used as indicator to compare different project investments within a project portfolio. The project with best ROI is prioritized.
ROI and related metrics provide a snapshot of profitability, adjusted for the size of the investment assets tied up in the enterprise. ROI is often compared to expected (or required) rates of return on money invested.
Hershey Co (NYSE:HSY) manufactures, imports, markets, distributes, and sells confectionery products. The company operates through two segments, North America; and International and Other. The Company over the previous 12 months has kept return on investment at 14.33%, up from industry’s average of 8.86% and sector’s average of 70.78%, according to Reuters.
BankUnited (NYSE:BKU) has been able to maintain return on investment at 26.50% for the last twelve months, higher than what Reuters data shows regarding industry’s average. The average of this ratio is 0.01% for the industry and sector’s best figure appears 0.66%. BankUnited, Inc. operates as the bank holding company for BankUnited, National Association that provides a range of banking products services to commercial and middle-market businesses, and individual customers in the United States.
Quintiles Transnational Holdings Inc (NYSE:Q) through its subsidiary, Quintiles Transnational Corp., provides biopharmaceutical development services and commercial outsourcing services in the Americas, Europe, Africa, and the Asia-Pacific. It operates through two segments, Product Development and Integrated Healthcare Services. The Company maintained return on investment for the last twelve months at 18.47%, higher than what Reuters data shows regarding industry’s average. The average of this ratio is -1.28% for the industry and sector’s best figure appears 14.63%.