What Is the Profitability Index (PI)? - Investopedia
Jun 16, 2025 · Businesses use PI to determine if a proposed project will be a worthwhile investment. The profitability index (PI) measures the attractiveness of a project or investment. The PI is …
Profitability index (PI) - explanation, formula, example, application ...
Apr 9, 2024 · Profitability index (PI) is the ratio of present value of a project’s expected future cash flow and initial investment needed to undertake the project. It helps companies and investors measure the …
Profitability Index - Learn How to Calculate the Profitability Index
What is the Profitability Index? The Profitability Index (PI) measures the ratio between the present value of future cash flows and the initial investment. The index is a useful tool for ranking investment …
Profitability Index Formula | Calculate Profitability Index (Examples)
Download FREE Profitability Index Formula Excel Template and Follow Along! What is the Profitability Index Formula? The formula for Profitability Index is simple and it is calculated by dividing the …
How to Calculate Profitability Index in Excel (with Easy Steps)
Nov 11, 2025 · In this article, I will demonstrate the steps to calculate the Profitability Index in Excel. Hopefully, you will find this article helpful before you start any professional project. What is …
Profitability Index (PI) | Formula + Calculator - Wall Street Prep
Oct 3, 2023 · The formula for calculating the profitability index is as follows. Profitability Index (PI) = Present Value (PV) of Future Cash Flows ÷ Initial Investment. Another variation of the PI formula …
Profitability Index Calculator | Good Calculators
It is calculated by dividing the present value of future cash flows by the initial amount invested. If the profitability index is greater than or equal to 1, it is termed a good and acceptable investment. The …
Profitability Index – Formula, Calculation, Example & Uses
Nov 28, 2025 · The profitability index model relies on discounted cash flows to determine whether an investment is financially viable. It assesses the economic value created by projecting future cash …
Profitability Index Calculator
Profitability index (PI) is a capital budgeting tool that measures an investment or project's potential profitability. It is useful as an appraisal method for ranking investment projects and quantifying the …
How to Calculate Profitability Index in Excel (Easy)
Aug 29, 2024 · Profitability index is a technique to evaluate the viability of investments/projects. It helps you forecast the returns and feasibility of a project to see if it is even worthwhile to invest. It is easy to …