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Profitability Index Calculation


Profitability Index Calculator

Profitability Index Calculator is an online tool which allows any Business or Company to calculate the amount of value created per unit of investment of a business enterprise and will assist you to take the right decisions on ranking projects

Profitability index is the ratio between PV of Future Cash Values and Initial Investment Profitability index (PI), also known as profit investment ratio (PIR) and value investment ratio (VIR), is the ratio of payoff to investment of a proposed project. It is a useful tool for ranking projects because it allows you to quantify the amount of value created per unit of investment. These are all the following rules applied in PI to accept and reject the projects. The project will be accepted if PI value is greater than one (PI > 1) and will be rejected if PI value is less than one (PI < 1). When it comes to online calculation this profitability investment ratio calculator can assist you to take the better decision on your project selection based on the respective input values of discount rate, initial investment and cash flow