How to properly calculate negative ROIs?
I am just wanting to calculate very simple ROIs, which could be very negative, but it doesn't seem to work.
Wikipedia defines ROI as this formula:
return on investment = (gain from investment – cost of investment) / cost of investment
This doesn't seem to work right for negative numbers, for exmaple:
If I spend 24.00 and make 2.00 my calculation would be:
(2-24) / 24 = -91.67%
This doesn't make sense to me, seeing as the total amount I lost was 22 which is 1000% of 2.
I hope someone can help explain what I am misunderstanding, or if there is a better way to work with negative ROI.