Get a quote 0808 250 0859

Return on Investment

What is an return on investment and how is it calculated?

26 reviews

Our reviews are based on realtime feedback 

Our reviews are based on realtime feedback 

Return on investment is a performance measure used to calculate exactly how effective your investments into your business are at generating income. ROI measures the profitability of investments and helps to compare the efficiency of multiple different investments.

As the name suggests, return on investment is a method used to measure the amount of return that can be made on a particular investment and how this compares and relates to the initial investment cost.

Key points about return on investment
    • ROI stands for Return on Investment and is used to measure how much financial benefit you will receive from a particular investment for your business.
    • To calculate ROI, you will have to divide the overall net benefit of an investment by the actual cost of the investment.
    • ROI is not static and so for the best outcome, it is better to calculate it regularly for every notable investment.
    • ROI should be calculated when you invest both time and money into your business.

Understanding return on investment

Any time you invest money or even time into your business, you will have a specific goal and a set of objectives in mind that you wish to achieve which, if met, would indicate that your investment has paid off.

Calculating ROI is also a good way of helping you to understand what is and isn’t working in your business so you can identify areas for improvement and make changes if needed. ROI helps you to delve deeper into the business decisions you make and gives you the chance to answer the question of what you will earn by investing time and money into any particular endeavour for your business.

It's also important to note that ROI isn’t static, and many variables can change with every different investment you make. If you want to calculate ROI and get an accurate sense of your commercial gains or benefits, the best idea would be to calculate ROI regularly so you can keep on top of any changes and make them to your business as needed.


How to calculate return on investment

Simply put, the formula to working out return on investment is as follows:

ROI = Current Value of Investment – Cost of Investment / Cost of Investment

The “Current Value of Investment” refers to the proceeds obtained from the sale of the investment of interest.

To calculate ROI, the benefit or return of the investment in question is divided by the overall cost of the investment. ROI is measure as a percentage which means it can be used to compare with returns from other investments and give you a better idea of what is working for your business and what investments are more beneficial for you.

  • Have you thought about Invoice Finance as a way to improve your business' cash flow?

    Invoice finance allows you to release cash quickly from your unpaid invoices.

    As your lender, we can release up to 90% of your invoices within 24 hours. On payment of the invoice from your customers, we will then release the final amount minus any fees and charges. There are different types of invoice financing options available to businesses depending on the situation and the level of control they require in collecting unpaid invoices.

    We are an invoice financing company who offer a solution whereby payments are collected on your behalf managed by our team of expert credit controllers so you can focus on running your business. Our Confidential Invoice Discounting solution is offered to businesses who want to maintain their own credit control processes, therefore this remains strictly confidential so your customers are unaware of our involvement.

    The benefits of invoice finance companies such as Hitachi Capital
      • Boost your cashflow without having to wait up to 120 days for your customers to pay you
      • An invoice finance company with a revolutionary digital onboarding process, giving you quicker access to funds and the ability to take on new business remotely during this lockdown period
      • Release up to 90% of the invoice straight away, and the final 10% when the invoice is settled
      • No need to chase your invoices, we can do it for you
      • 6 month trial period followed by a rolling contract

Get a quote online or call 0808 250 0859

We will use your details to contact you in relation to this enquiry only.

Return on Investment FAQs

How do you calculate return on investment?

Return on Investment can be calculated by dividing the net benefit of your investment by the overall cost of the investment in question.

What is a typically good ROI?

ROI’s will differ for each business in each industry and entirely depends on a variety of factors including risk tolerance of the investor, time required for the investment to generate results and return and much more.

What industries will have the highest ROI?

Average ROI’s will always differ and develop for different industries due to technological changes, shifts in consumer preferences, fluctuations with competition and more. Arguably, technological industries may have higher ROI’s than others.

We have revolutionised cash flow finance with our digital onboarding process

We are an award winning cash flow finance company

Best Invoice Finance Service 2021

Highly Commended Factoring Provider 2021

Best Invoice Finance Provider 2020


Read out latest client reviews

Please note that costs are an estimate only and are based on the entered values. Your final quote may change once a Business Development Manager has assessed your business in more detail.

Get a quote now Check Eligibility

Why choose Hitachi Capital Invoice Finance as a way to improve your working capital

      • A 6 month trial period so you can be sure the product is right for you
      • Followed by a 6 month rolling contract – we don’t tie our clients in for long periods
      • A one fee solution with no hidden fees
      • Award-winning client service by our team of expert Client Managers
      • Our Relationship Management team are in the field to visit you in person
      • We are part of Hitachi Capital (UK) PLC, a company that is going from strength to strength – we’re here for the long term.

Smarter, Faster and Simpler Cashflow Finance with Hitachi Capital

Smarter, Faster and Simpler Cashflow Finance with Hitachi Capital

Smarter, Faster and Simpler Cashflow Finance with Hitachi Capital

Find out how we are revolutionising the way UK SME's access cashflow finance.

Get a quote

Contact our friendly UK advisors on freephone

0808 250 0859

8:45 - 17:15 - Monday to Thursday &
8:45 - 16:45 - Friday