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Profitability Index Calculator
Evaluate whether an investment is worthwhile with the Profitability Index (PI), comparing the present value of returns to the upfront cost.
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What is the Profitability Index?
The Profitability Index (PI), also called the value investment ratio, measures the relationship between the present value of an investment’s future cash flows and its initial cost.
The formula
PI = Present Value of Future Cash Flows / Initial Investment. A PI greater than 1 means the investment is expected to add value (the present value of returns exceeds the cost); a PI less than 1 suggests the investment would destroy value.
This calculator is for general capital-budgeting education.
Last reviewed August 2026