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Sara Sack Director of Assistive Technology for Kansans May 25, 2007
is a metric that yields some insights into how to improve business results in the future (L. Dombrowski)
The benefit (return) of an investment is divided by the cost of the investments; the result is expressed as a percentage or a ratio. This is referred to as simple ROI.
ROI= Gains from investment Cost of investment Cost of Investment
$700,000 - $500,000 = 40% $500,000
ROI is used to compare returns on investment where the money gained or lostor the money investedare not easily compared using monetary values. For example, a $1,000 investment that earns $50 in interest obviously generates more cash than a $100 investment that earns $20 interest, but the $100 investment earns a higher return. So.
Locate software programs designed to help managers identify total benefits and total costs Establish measures and state them publicly before calculating ROI Determine time periods and state them carefully. Determine appropriate calculations to be made. Be aware that shorter or longer time periods may produce quite different ROIs.
Review electronic management software including RADDIE, Solution Matrix, and others Determine Internal and External benefits and costs
Staff/labor costs Storage Transportation/delivery costs Repair costs Supplies Marketing and outreach Training Volunteer time and associated costs Overhead
Questions?
For more information contact: Sara Sack, University of Kansas, 620421-8367 or ssack@ku.edu