How i can calculate return on investment. iam a distributor of mobile phones what is my investment?

give me various farmulas of calculating return on investment.if i am a distributor of mobile handsets,then what expenses and what money i can consider that it is my investment.

Put simply, your Return on Investment (ROI) is worked out by calculating how much profit (money in your pocket) will a deal make in the first year, multiplied by 100, divided by the amount of money you are going to have to invest (or the value of the time you will be spending or both), to acquire that profit.

That, roughly speaking, is your return on investment expressed as a percentage.

If you know the value of your time (and I prefer clients to calculate the value of their time as it will be when they are successful rather than how much it is worth when they are not!) then you can move to step 2, if not, here is step 1.

Step 1.

Work out how many holidays you will want when you are successful. Then divide the number of weeks left in a year, by the number of days you want to work per week. Then divide that by the number of hours you want to work per day.

Then take the sum you want to earn (in your pocket) per year. Divide it by 60 and multiply it by 100 to allow for 40% tax, and then divide it by the number of hours you want to work per year.

This will give you the value of your time, per hour, when you are successful.

Step 2:

Remember there are two elements to any investment; the money you put into it, and your time (which has a value)

For example, a house that costs 拢50,000 and will generate 拢2400k per annum of rental income profit, after expenses, roughly generates a 4.8 % return on investment. (Not to be confused with rental yield, which is different again).

If you think that the property may grow in value by 10% that year, then add 拢5,000 to the 拢2400 rental profit, to find that your ROI is now 14.8%.

Compare that with a similar deal, where you can buy a business card printing machine franchise generating 拢25,000 per year profit and you have to put in 拢75,000 to acquire the business. 33.3 % ROI and you have to go round emptying the money. Worth it for those returns, you say?

But what if you had an 80% mortgage on the property above, and the interest repayments were covered by the rent, still leaving you with the same rental profit per annum?

You have spent 拢10k to acquire that profit, you have a profit including capital appreciation of 拢7400k so your ROI is now 74%. And no work for you, in the form of the money collection.

But whichever way, both returns are a bit better than the building society returns and both are "Feed Me's" in Robert Kiyosaki terms.

If you are looking at a business opportunity, add up how many hours in a year you will spend, multiply that by the amount your time is worth, per hour, and add the financial investment in start up costs and overheads for the year.

Say that comes to 拢50,000, and you estimate you will make a profit (pay yourself) of 拢20,000 after covering all costs. In the first year your ROI will be

20k x 100 divided by 50k = 40%

But if 拢50k included 拢10k to get into the opportunity, your ROI would improve in Year 2, as the sum would look like this:

20k x 100 divided by 40k = 50%

Your can use this model to compare a property investment opportunity, with a stockmarket opportunity, with a business opportunity, with an internet marketing opportunity. These are the 4 main ways to make money - what we in The Money Gym call the "Four Lanes Of The Wealth Highway".

Decide on your criteria, use your yardstick, don't change the goalposts and choose opportunities to fit your strategy or plan.

If you are thinking of setting up a new business, think about the projected return on your investment and what your exit strategy will be - how will you get your money out again?

Most entrepreneurs think that they have to sink everything into their business in terms of time and money; this shows commitment after all.

A serious businessperson, however, would be planning to get their money out again as soon as possible, with a good ROI, while leaving the business to thrive healthily and continue to pay them dividends based on profits.

Any self respecting "business angel" is looking for their money back out within one to three years, and then a minimum of 35% return on investment for every year that their money is being used.

Buy "E-Myth Revisited" and "Rich Dad's Guide to Investment" and devour them. Make notes, underline, and take on board their wisdom.

I promise you, if you do, your business will never be the same.

http://www.supervision-management.com/

Your profit divided by your total sales.
Your profit is your revenue minus your expenses.

its simple n basic how much u invest i.e. spend(purchases plus the total expenditure) minus the total sales

Return on investment (ROI) is a ratio that is calculated by dividing your net operating income (Sales less Expenses) by invested capital (cash and assets purchased and owned by your business). The higher this ratio the best it reflects your business peformance. The way we control the success in this case is to lower your expenses as much as you can without sacrificing the quality of your product. Besides,eleminating or reducing unnecessary costs ( like an extra employee or extra phone line.....etc). Good Luck