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ROI _ReturnOnInvestment_ ROI_

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					ROI (ReturnOnInvestment, ROI)
Return on investment (ROI) is the investment should be returned by the value of an
investment company from its investment in the business activities of economic returns.
It covers the company's profit goals. Operating profit and investment
related to the essential property, because managers must be existing property through
investment and profit.
Return on investment formula
Return on investment (ROI) = annual profit or annual profit / total investment × 100%
Can be seen from the formula, companies can reduce sales costs and improve
profitability; improve asset utilization to increase return on investment.
Return on investment (ROI) has the advantage of simple computation; drawback is
the time value of money does not take into account factors not accurately reflect the
length of construction period and the amount of investment and recovery of the
availability of different conditions, such as the impact of the project, molecular,
denominators caliber poor comparability can not directly use the net cash flow
information. Only the investment profit margin is greater than or equal to the risk-free
investment profitability of investment projects that have the financial feasibility.
Return on investment (ROI) are often time-sensitive - returns are usually based on
some particular year.
One of the following circumstances, individual income tax may be reduced upon
approval:
The disabled, the widowed lonely old people and families of martyrs;
Second, due to serious natural disasters causing enormous losses;
Third, the financial department of the State Council approved the other tax cuts.
Reduction of personal income tax, the reduction of the magnitude and duration of the
provinces, autonomous regions and municipal governments.
The education of individuals to obtain income from interest on savings deposits and
the financial department of the State Council and other special savings deposits or
savings deposits of a special fund interest income, exempt from personal income tax.
The term refers to individual education savings according to state regulations in
designated bank account to deposit the amount of funds provided for the educational
purposes of the special savings.
Interest rate and the difference between return on investment
Interest rate
Also called interest rate. That period of time the ratio of interest and principal amount,
usually expressed as a percentage, is calculated as the annual interest rate. The
formula is:
The amount of interest rate = interest / principal
The level of interest rates, determine the number of loan capital in a period of time
how much to interest. Factors affecting interest rates, mainly the marginal
productivity of capital or capital supply and demand. There is also the length of time
committed to the delivery of money and the degree of risk. Interest rate policy is the
main Western macro-monetary policy measures, in order to intervene in the economy,
changes in interest rates by indirect means to regulate the currency. During the
recession, lower interest rates, expand the money supply to stimulate economic
development. In the expansion period, raising interest rates, reduce the money supply,
inhibition of the vicious economic development.
ROI
1. Return on investment (ROI, Return On Investment), is up to the normal annual
production of annual profits profit or a percentage of total investment. The formula is:
return on investment (ROI) = annual profit or annual profit / total investment × 100%
2. ROI is simpler; weaknesses without considering the time value of money factor, not
accurately reflect the way of construction duration and investment and recovery of E
in the availability of different conditions such as impact of the project, molecular,
denominators comparable caliber is poor, can not directly use the net cash flow
information. Only the investment profit margin is greater than or equal to the risk-free
investment profitability of investment projects that have the financial feasibility.
ROI is often time-sensitive - returns are usually based on some particular year.
Retail investment yield four algorithms:
At present, the rapid investment boom shops warming, then how commercial
investment rate of return calculated? According to the staff, shops investment rate of
return method has the following:
1. Rental rate of return method
Formula: (after-tax monthly rent - mortgage monthly payments) × 12 / (first time
paying back the principal + Forward House of mortgage). Advantages: consider a
rental, price, and pre-primary inputs, the rate of return than the rent applicable to a
wide range of analysis, the length can be estimated payback period.
Insufficient: does not consider the other pre-investment funds time effect. Solve
several sets of issues of investment cash. And due to its inherent one-sidedness, not as
an ideal investment analysis tools.
2. Rental rate of return analysis
Formula: (after-tax monthly rent - monthly property management fee) × 12 / buy
houses total, the greater the ratio calculated this way, it shows that the more worth the
investment.
Advantages: consider the rent, rates and the relative relationship between two factors,
is to select "blue chip real estate" fast-track approach.
Inadequate: not considered all the input and output, without considering the time cost
of funds, it can not serve as a comprehensive basis for investment analysis. On
mortgage payments can not provide specific analysis.
3. Internal rate of return method
Real estate investment formula is: total gross income / total monthly rent of the total
investment = investment period × number of months the accumulated rental / (first
paying back the mortgage deed + overhaul + insurance + fund + furniture, and other
input + section + aggregate total of the mortgage property management fee) = internal
rate of return.
Above formula with a mortgage as an example; not take into account interest
payments, does not consider intermediate expenses; total income, investment are
considered within the investment period.
Advantages: Internal rate of return method considers all inputs and investment income
during the period, cash flow and other factors. Can be used in conjunction with the
rental rate of return. Internal rate of return may be understood as the deposit banks,
but the bank interest rates calculated by simple interest, while the internal rate of
return is calculated by compounding.
Inadequate: by calculating the internal rate of return to judge the investment value of
the property to today's data are based on inference to the future, the future
rents Change is unknown.
4. Simple International Assessment Act
Basic formula is: If the property's annual income × 15 years = property
purchase price is considered the property value for money. The international
specialized financial firms to assess the value of an investment property a simple way.
Any property investment, investors want to have a reasonable return, or even a good
return, the saying goes: money-losing business without people. Investors to judge
whether their investment value, they usually are to see return on investment of the
property, then, how to calculate return on investment, how to determine return on
investment included the point?
How to calculate ROI
There insiders tell us that such a calculation formula for calculating the ROI:
Lease purchase and then calculate the investment return rate = monthly rent × 12
(months) / Price
Re-sold, bought calculating ROI = (sell price - the purchase price) / Purchase Price
For example, a street shop, an area of about 50 square meters, priced at about 200
million, currently surrounding the property, the same monthly rent for the property is
400 yuan / square meter, that is: the shop to buy and successfully if the rentals, The
new owners will likely get 2 million in monthly rent. Well, its investment rate of
return will be? Now let's calculate:
Apply the formula: return on investment in this property = 20,000 yuan × 12/200
million, through the calculation, we have come to this property will be a return on
investment: 12%
If this investor release changed hands, and to 2.15 million contract, then its return on
investment = (215-200) / 200, by calculation, we have come to this property will be a
return on investment: 7.5%
How to determine return on investment
Now, ROI calculation, then, how do we judge the significance of these values it
contains? In other words, what value is that a reasonable profit? Which never left the
value is that? Which values are very good that it's revenue? Or the values
which are good conditions for the other out, they have to carefully consider our cars?
The industry believes that interpretation of these values within the line is not a
standard answer, probably 10 people will have 10 answers. However, according to this
newspaper from some real estate professionals and investors in the hands of data
recovery, these answers are actually almost the same, only difference values after the
decimal point.
Property Survey Department according to head of second-hand description Szeto
Paige: Actually, the ideal of different property investment returns vary, such as Take
our "special business perspective," has been explored in the
residential and commercial properties, unfinished Fan biological industry, the MTR
property and property for the elite schools, their reasonable profit, investment and
high profit margins will be the critical point along the following table:
Reasonable rate of return on investment property type critical point of high rate of
return (subject to careful)
Residential and commercial properties 10-12%> 15% 7%
9-10% bio-industry unfinished Fan> 6% 20%
Metro Property 3-6%> 3% 10%
The factors that determine return on investment have?
"Investment" means your personal money, time or energy
resources into your profits or expected to have a satisfactory return of things can go.
Start your own company is that you use their own resources, a major investment. You
decide what kind of company start-up, is not their money, time and energy to the best
investment? In this chapter, we will study the top businessmen in the decisions made
by the use of such methods.
ROI
You mean to start a business of their time, energy and money on long-term, day to day
investment. You do this because you believe that one day the company's
return on investment will be greater than the current time, effort and money value.
Inadvertently, you have calculated the return on your investment and have found that
the rate of return is acceptable.
Business people need to understand their investment return rate is. Rate of return is
usually referred to as return on investment Returnoninve
stment ("Return of return" means "profit
profit", preposition "on" means "divided
by"), which is based on an initial investment expressed as a percentage.
I found that any young man can learn to calculate the rate of return. In my company, I
see that the rate of return for a new entrepreneur is a very important decision-making
help. I started with 32,000 U.S. dollars, spent every penny on, I can calculate how
much of the investment return. I asked myself: Can this expenditure improve my ROI?
This analysis indeed been great help to me.
How to calculate ROI
Here's how to calculate your return on investment:
1 first calculating the expiration of a certain business property that you have the
amount, called the end of your property and A.
2 deduct your initial investment in the company. The initial investment as of the
beginning of your property and B.
3 results divided by the beginning of your period property.
4 finally multiplied by 100 to indicate the percentage of your return.
Formula: A-BB × 100 = ROI (return on investment)
For example, you identify the local church is planning to hold a children arts and
crafts events. They need 50 pieces for the kids shirt screen printing. You go to the
wholesale market to the price of 4 U.S. dollars each to buy 50 shirts, a total of 200
U.S. dollars spent:
50 shirts × 4 USD / each = 200 U.S. dollars
Then you price of 400 dollar shirt sold the church. Using the above four steps to
calculate your rate of return on the investment much?
-200 U.S. dollars 200 U.S. dollars 400 U.S. dollars = 200 U.S. dollars 200 U.S.
dollars = 1 × 100 = 100%
The investment return rate of 100%.
Here is a simple way to remember the formula:
You pay your income × 100% = ROI
ROI I use every day decision-making tools, you not only the concept can be applied to
business affairs, you can put into your personal affairs of its decision. Remember,
when you spent in a matter of time, money or effort, you are making an investment.
Otherwise, if you can not decide to do one thing, then look at its return on investment
In the commercial formula, "Return of return" means
"profit profit", preposition "on" means
"divided by." ROI means return (AB) divided by the investment
(B)
Investment rate of return and risk is proportional to
The return investors require depends on his or her mind how much investment risk. If
a risky investment, investors will expect a high rate of return.
Risk factors include time (time) and liquidity (liquidity). An investment longer
required, it should be the higher rate of return. Others use your money longer, for
some unforeseen accident Ershi probability of loss of funds greater. As an investor
you will want to make some compensation for this risk.
As an investor, you must also consider the liquidity. Liquidity refers to an investment
of capital investment and withdraw the ease. How the mobility of investment funds?
In particular, you need money, you can withdraw your investment into the
company's funds? If so, the liquidity of this investment is strong, or that the
assets can be converted into cash.
In short, your return on investment need to wait longer, the higher the returns on the
corresponding. The more likely you are to recover the funds invested, return on
investment may be lower.
Small business risks and high returns
Small business investment rate of return can be very high. For most small businesses,
the risk of failure is very high. According to the Small Business Administration
(theSmallBusinessAdministration) estimates, 7 only a small business can survive the
fierce competition. On the other hand, there are many entrepreneurs are not
experienced failure down, on the contrary, they start to become millionaires or even
billionaires new business. As long as your basic reserves is not due to the failure of
commercial depletion, failure can become a very good experience.
Of the failure must be prepared. Sit down and think carefully, because if you pay is
less than the cost to produce or provide products and services to attract customers,
what would happen? Then you will be returned to working for others, or to establish
other enterprises? Before your next profitable, you have enough savings to cover your
basic living expenses?
The higher the investment risk, the higher the required rate of return.
Q: The monthly rate of return on investment of 10% of 100 first year, ten years how
much?
I would like to learn financial management, assuming 10% return on investment, I
invested 100 yuan per month, 10 years will receive how much?
Best answer
Simplify the problem if you look, assuming an annual investment of 1,200 yuan, the
investment rate of return of 10%, then 10 years later, the total receipts of principal and
interest is: 21,037.40 yuan.
In fact, this is a geometric series summation problem. Geometric series summation
formula: S = a (r ^ n-1) / (r-1) 〔S is the sum of which, a as the initial value, r the
common ratio, n is the number of items, r ^ n is means the n-th power of r).
Income in the calculation used the formula to change it to: S = ar (r ^ n-1) / (r-1)
because you have already started to gain the first end of the (principal and interest of
which the total income S, a fixed investment value is 1,200 yuan here, r for the
investment income plus 1-year or 10% +1 = 110%, n the number of years for the
investment, in this case is 10).
ROI calculator to help you calculate how high the rate of return to complete the
investment objectives.
Appendix: Companies need to bank loans, what information?
The bank loans are mostly mortgages, that is, must have collateral to loans
Bank statements for solvency of enterprises mainly, asset liability ratio of not more
than 60% as good, fixed assets should not exceed 25% of total assets. Do not report a
loss.
Have produced evidence secured by the fair.
1. Audited financial statements
2. Business license and a copy of
3. Enterprise code certificate and a copy of
4. The legal representative of the identity card
5. Is the value of mortgage assets, the assessment report (a bit is the designated
institutions to assess the lending bank)
Case Analysis
For example, you identify the local church is planning to hold a children arts and
crafts events. They need 50 pieces for the kids shirt screen printing. You go to the
wholesale market to the price of 4 U.S. dollars each to buy 50 shirts, a total of 200
U.S. dollars spent:
50 shirts × 4 USD / each = 200 U.S. dollars
Then you price of 400 dollar shirt sold the church. Using the above four steps to
calculate your rate of return on the investment much?
(400 U.S. dollars -200 U.S. dollars) / 200 U.S. dollars * 100 = 200 USD / 200 U.S.
dollars * 100 = 1 × 100 = 100%
The investment return rate of 100%.
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