3 ms·
Ratio can't be negative, they can either be above of below 1. What you are talking about is "$benefit - $cost", not "$benefit / cost".
by alacombe 6y ago
Ratio can't be negative, they can either be above of below 1. What you are talking about is "$benefit - $cost", not "$benefit / cost".
- rocqua 6y agoWe tend to call most rations below 1 'negative'. Its technically wrong but most people get what you mean when you say it.
- ducttapecrown 6y agoPositive and negative are the right words on a log scale :D
- deleted 6y ago[deleted]
- ddulaney 6y agoROI is (net benefit)/(cost), where net benefit is (gross benefit - cost). Net benefit can be negative, making ROI negative if cost exceeds benefit. GP was using benefit as a shorthand for net benefit, which can certainly be negative.
- loeg 6y agoEven gross benefit could conceivably be negative, if the ads are bad enough! (I.e., a terrible ad might prevent a sale.)
- benjam47 6y agoRatio can't be negative, but ROI can. Positive ROI is the percentage of the ratio being 1 or higher. Negative ROI is the percentage of the ratio being less than 1. Or, from a "common sense" perspective, if I spent $1000 on advertising, and earned $100 in revenue from that investment, my ROI is definitely negative.