Listen to a Business English Dialogue About Return on invested
Molly: Hi Morgan, have you heard about “return on investment” in business and finance?
Morgan: Hi Molly! Yes, return on investment, or ROI, is a measure used to evaluate the profitability of an investment relative to its cost.
Molly: Exactly. It’s calculated by dividing the net profit from the investment by the initial cost and expressing it as a percentage.
Morgan: Right. A higher ROI indicates that the investment has generated more profit relative to its cost, making it more lucrative.
Molly: Yes, businesses often use ROI to assess the performance of different investment opportunities and prioritize those with the highest returns.
Morgan: Absolutely. By comparing the ROI of various projects or investments, businesses can make informed decisions about where to allocate their resources.
Molly: Indeed. It’s essential for businesses to consider not only the potential returns but also the associated risks when evaluating investment opportunities.
Morgan: Right. Investments with higher potential returns typically come with greater risk, so it’s crucial to strike a balance between risk and reward.
Molly: Yes, and monitoring ROI over time allows businesses to track the effectiveness of their investments and adjust their strategies accordingly.
Morgan: Definitely. By continually assessing and optimizing their investment portfolio, businesses can maximize their overall return on investment and achieve their financial goals.
Molly: Absolutely. Ultimately, a positive ROI is essential for businesses to sustain growth and profitability in the long run.