Profitability Index
Compare discounted future inflows against an initial cost.
Your numbers
Profitability index
Educational estimate using your assumptions; no live rates, tax rules or investment recommendations. Returns can be negative and are not guaranteed.
Scenario comparison
Up to three snapshots in this tab. Loading one replaces the current inputs.
Formula
Use PI = Σ Cₜ/(1+r)^t / I for periods after the initial investment. Cₜ is a future inflow, r is the discount rate per period as a fraction, and I is the initial cost. The ratio compares discounted inflows with that cost.
Compare discounted future inflows against an initial cost.
Worked example
- Initial cost
- 1000
- Future inflows, period 1 onward
- 400, 400, 400
- Discount rate per period (%)
- 0
- Profitability index
- 1.2
- Net present value
- 200
Scope and limitations
Educational estimate using your assumptions; no live rates, tax rules or investment recommendations. Returns can be negative and are not guaranteed.
Inputs are checked for missing values and allowed ranges. A result outside the finite numeric range is not displayed. Rounding affects display, while the calculation uses the model’s numeric precision.
Check your units and assumptions before relying on a result. Changing a label does not convert a currency or physical unit.
Formula version: a7d576190a52 · Example checked: