Finance

Profitability Index Calculator

PI = present value ÷ investment.

Parameters Live Compute
Calculated Output
Profitability index 1.25
Step-by-Step Breakdown
1. Values used:
2. PV of future cash flows = 25,000 $
3. Initial investment = 20,000 $
4. Profitability index = PV of future cash flows / Initial investment = 25,000 / 20,000 = 1.25
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PI > 1 means project creates value.

Frequently Asked Questions

Vs NPV?

PI normalizes by investment size, making projects comparable.

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