What does the ROI calculation measure?

The ROI (Return on Investment) calculation specifically measures the gain or loss generated relative to the amount of investment made. It provides a percentage that reflects how effectively the investment has performed, making it a crucial tool for assessing the profitability and efficiency of an investment over time.

When viewed in the context of decision-making, understanding ROI helps investors and managers evaluate various opportunities by comparing the returns of multiple investments. This makes it essential for assessing the viability of different projects or expenditures within a community pharmacy, as it allows management to determine which investments yield the best financial outcomes.

In contrasts to the other options, ROI does not directly measure profit per unit sold, the effectiveness of marketing strategies, or the overall financial health of a company. While these aspects may be influenced by the ROI of specific investments, they are assessed through different metrics or analyses rather than the ROI calculation itself.