Skip to calculators
calcmintly

Profitability Index

Compare discounted future inflows against an initial cost.

Add to workspace

Your numbers

Local calculations. Results are estimates, not professional advice.

Profitability index

—

Educational estimate using your assumptions; no live rates, tax rules or investment recommendations. Returns can be negative and are not guaranteed.

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:

Methodology

Related tools