Which calculation shows the value of an investment?

The calculation that demonstrates the value of an investment is Return on Investment (ROI). This metric is used to assess the profitability or efficiency of an investment, providing a straightforward percentage that indicates how much profit is generated for each dollar invested. By comparing the net profit from an investment to the initial cost, ROI clearly shows whether an investment has yielded a positive return or not.

Calculating ROI helps investors and organizations make informed decisions about where to allocate resources for maximum benefit. It reflects the effectiveness of the investment strategy employed and is crucial for evaluating the performance of various investments.

In contrast, while concepts like return on expenses, return on capital, and return on assets are valuable in financial analysis, they do not specifically focus on measuring the overall value generated from a particular investment in the same direct manner as ROI does. Each of those metrics pertains to different aspects of financial performance and may apply in more specific contexts rather than giving a broad view of investment effectiveness.