Question on ROI math

[ernie simons]

I invest $235 in wagers. My winnings total $426. I subtract $235 from $426 leaving $191 profit. I then divide $235 by $191 giving me $1.23 ROI? Or do I have to figure in my bets with my profit giving me a $2.23 ROI?

[njcurveball]

Originally Posted by ernie simons

I invest $235 in wagers. My winnings total $426. I subtract $235 from $426 leaving $191 profit. I then divide $235 by $191 giving me $1.23 ROI? Or do I have to figure in my bets with my profit giving me a $2.23 ROI?

Some people quote this as a $2 bet, others quote it to the $1.

In any case if you got 191 after betting 235 you almost doubled your money, so the number would be a little less 2 (for $1) or 4 (for $2).

I can see your confusion, as it seems this is about as consistent as how they post the exotic prices.

Take the easy way out and divide your bet (235) into what you collected (426).

That would give you a 1.81 ROI! AND a nice job!

Jim

[BIG RED]

This is something I would love to be settled, on asking terms.

I come up with an +0.81 ROI. Which is 81% profit of what you bet. Same as your final result, but looks totally wrong? I always get confused when a see other #s posted.

I took his profit and divided by his bets?

[stu]

Originally Posted by ernie simons

I invest $235 in wagers. My winnings total $426. I subtract $235 from $426 leaving $191 profit. I then divide $235 by $191 giving me $1.23 ROI? Or do I have to figure in my bets with my profit giving me a $2.23 ROI?

I like to see it in percentage form to reduce the confusion.

ROI = {(total return - total bet)/total bet} x 100%

= {(426-235)/235} x 100%

= 81.3% profit


I like this technique because break even is zero and losses are a negative number. In other styles where break even is $1 or $2 it isn't immediately
discernable if the guy is making a profit.

To each their own,
stu

[Overlay]

I would divide the $235 by 2, to get its equivalent in $2.00 wagers, or 117.5, and then divide that into $426, producing $3.62 (rounded down). (Quirin or Nunamaker, for example, always called this figure $NET.) This means that you got back that much for every $2.00 you wagered. The $1.62 in profit on the $2.00 wager would be equal to the 81% rate that's been mentioned.

[ranchwest]

Originally Posted by ernie simons

I invest $235 in wagers. My winnings total $426. I subtract $235 from $426 leaving $191 profit. I then divide $235 by $191 giving me $1.23 ROI? Or do I have to figure in my bets with my profit giving me a $2.23 ROI?

This is very simple. Return on Investment should be taken literally, return divided by investment. 426/235 is the correct way to compute ROI. No matter how many ways it is done wrong, there's only one way that is right.

[Pace Cap'n]

Was not the return $191?

[Greyfox]

Originally Posted by Pace Cap'n

Was not the return $191?

Yes. The return was $ 191.
191/235 = .81
As a percentage .81 x 100 = 81 % (as has been mentioned)

[Greyfox]

Originally Posted by Greyfox

Yes. The return was $ 191.
191/235 = .81
As a percentage .81 x 100 = 81 % (as has been mentioned)

The return on investment was $ 191.
The investment was $ 235.

Investment= 1.00 Return on Investment = +.81
Investment + Return on Investment = + 1.81

[Greyfox]

I was wrong above.
The equation should be:

Investment + Profit(or Loss) = R.O.I.

In the example above:
Investment = 1.00
Profit = .81
Return on Investment = 1.81

[traynor]

The easy way is the amount you won, minus the amount you bet, divided by the amount you bet. (total won - amount bet) / amount bet. That will put you on the same page as everyone else citing ROI figures.

[ernie simons]

Originally Posted by traynor

The easy way is the amount you won, minus the amount you bet, divided by the amount you bet. (total won - amount bet) / amount bet. That will put you on the same page as everyone else citing ROI figures.

Which puts my ROI at .81 or 81% which is the same. This 81% seems to be the constant.
Thanks for the help guys. I appreciate it.

[BIG RED]

See what I mean.

We do it all different but come up with the same results. Like Grey said, it is ROI not I+ROI. I'll stay with mine. +.81 (81%)

[maxwell]

Another simple way is to divide the profit by the dollars wagered.

426 - 235 = 191 profit.

If you made 10 $2 wagers = 20

191/20 = 9.55 ROI ( 9.55 x 20 = 191 )

Now if the rest of the game were this easy ....