What does rate of return on investment mean ?

Rate of return on investment (ROI) is a measure used to evaluate the efficiency or profitability of an investment. It is calculated by dividing the net profit or gain from the investment by the initial cost or investment amount, and then expressing the result as a percentage. A higher rate of return indicates a more profitable investment, while a lower rate of return indicates a less profitable investment. ROI is commonly used by investors to compare the potential returns of different investment opportunities and make informed decisions about where to allocate their funds.