What is the Profitability Index Calculator?
The profitability index calculator is a free online tool that helps you work out profitability index quickly and accurately. It uses the standard formula PI = PV of future cash flows / initial investment and shows the result instantly as you type, along with a full breakdown so you can see exactly how the answer was reached.
How to use this calculator
- Enter PV of inflows.
- Enter the initial investment.
- See the index.
Formula used
PI = PV of future cash flows / initial investmentExplanation of each input
- Present value of future cash flows โ the present value of future cash flows used in the calculation.
- Initial investment โ the initial investment used in the calculation.
Understanding your result
- Profitability index โ the calculated profitability index.
Step-by-step calculation
For the example values 130000 / 100000:
- Apply the formula:
PI = PV of future cash flows / initial investment - Substitute the values: 1.3
- Result: PI = 1.3
Worked example
| Inputs | 130000 / 100000 |
|---|---|
| Working | 1.3 |
| Result | PI = 1.3 |
Benefits and practical uses
This calculator saves you time and reduces errors when you need profitability index. It is useful for students, professionals and anyone who wants a fast, reliable answer without manual calculation. Results update instantly, work in your browser and can be copied or shared in one click.
Assumptions and limitations
- PV computed separately.
Frequently asked questions
What PI is acceptable?
A PI above 1 means the project creates value.
Disclaimer: This calculator provides estimates for general information only and is not financial advice. Returns are illustrative and not guaranteed; consult a qualified financial adviser before making decisions.