Schedule mock interviews on the Meeting Board, join the latest community discussions in our Consulting Q&A and find like-minded Interview Partners to connect and practice with!
Back to overview

Could someone give a good explanation of ROI>100% using the ROI=NET PROFIT/ COST OF INVESTMENT?

4
1.2k
22
Be the first to answer!
Nobody has responded to this question yet.
Top answer
Maria
Coach
edited on Jan 30, 2025
Ex-McKinsey Engagement Manager in NYC | Part of the McKinsey Private Equity Practice

Hello! 

ROI>100% happens when your net profit is higher than the initial investment.

Let's say you bought 10 apples for $100 (or $10/apple). This $100 is your 'cost of investment'. Let's then say that you went and sold these apples in a place where they were very highly valued. You managed to get $100/apple, for a total sales value of $1,000. Let's assume that, after you cover transportation costs, renting a space to sell them, etc., you have $200 left (your net profit). Your ROI is 200% ($200/$100). 200% ROI means you made back 100% of your initial investment of $100, plus another 100%.

This is an exaggerated example, but hopefully it helps highlight the concept of ROI>100%.

Best,

Maria 

Hagen
Coach
on Feb 02, 2025
#1 recommended coach | >95% success rate | 9+ years consulting, interviewing and coaching experience

Hi there,

I would be happy to share my thoughts on your question:

  • If an ROI of 100% means that the gross profit on the investment is twice the costs of the investment, an ROI of >100% means that it is more than twice the costs.

If you would like a more detailed discussion on your specific situation, please don't hesitate to contact me directly.

Best,

Hagen

Alessa
Coach
on Jan 30, 2025
xMcKinsey & Company | xBCG | +200 individual & group coachings | feel free to schedule a 15 min intro call for free

Hey!

If ROI is 100%, it means the net profit equals the initial investment, meaning you've fully recovered the cost and made an equal amount in profit.

If ROI is greater than 100%, it means the net profit exceeds the investment cost.

Alessa 

Thabang
Coach
on Mar 13, 2025
Ex-McKinsey Consultant | McKinsey Top Coach & Interviewer | Special Offer: Buy 1 Session Get 1 Free (Limited time!)

Hey there, 

ROI = [Net Profit / Cost of Investment]

So it ROI = 100%, it means:

  • Net Profit = Cost of Investment. Meaning you fully recover the exact amount of investment cost in profits

ROI > 100% means you recover more than the value of your investment costs

All the best

Similar Questions
Consulting
What are the most relevant skills to develop for a career in Consulting and Finance?
on Jun 26, 2025
Global
6
< 100
Top answer by
Evelina
Coach
EY-Parthenon (7 years) l BCG offer holder l 97% success rate l 30% off first session l free 15' intro call l LBS
6
6 Answers
< 100 Views
+3
Consulting
Hi, I am confused about what exactly is the formula for ROI. Is it (Profit-Cost)/Cost (see picture 1) or Profit/Cost (see picture 2)? Both cases are from Darden and googling online both equations show up. Thank you a lot!
on Feb 18, 2025
Global
4
800+
Top answer by
Mattijs
Coach
Free 15m intro call | First session -50% | Bain| Hiring team | 250+ successful candidates
22
4 Answers
800+ Views
+1
Consulting
Question about
Why do we calculate with EBIT and not NOPAT when calculating EVA = EBIT - CE*WACC?
on Feb 25, 2025
Global
3
700+
Top answer by
Ex-BCG Principal & Senior Recruiter in Germany | 300+ real recruiting interviews at BCG | Free 15min intro call
9
3 Answers
700+ Views