This Profitability Index (PI) template will help visualize the present value of future cash flows, which will then be used to calculate the PI of the project. The PI measures the ratio between the present value of future cash flows to the initial investment. Other names for profitability ratio are Profit Investment Ratio (PIR) and Value Investment Ratio (VIR).
Here is a snippet of the template:
Download the Free Template
Enter your name and email in the form below and download the free template now!
Project Profitability Index
Download the free Excel template now to advance your finance knowledge!
Profitability Index Formula
The formula for the PI is as follows:
If the PI is greater than 1, the project generates value and the company should proceed with the project.
If the PI is less than 1, the project destroys value and the company should not proceed with the project.
If the PI is equal to 1, the project breaks even and the company is indifferent between proceeding and not proceeding with the project.
The higher the profitability index, the more attractive the investment.
More Free Templates
For more resources, check out our business templates library to download numerous free Excel modeling, PowerPoint presentations, and Word document templates.
Below is a break down of subject weightings in the FMVA® financial analyst program. As you can see there is a heavy focus on financial modeling, finance, Excel, business valuation, budgeting/forecasting, PowerPoint presentations, accounting and business strategy.
A well rounded financial analyst possesses all of the above skills!
Additional Questions & Answers
CFI is the global institution behind the financial modeling and valuation analyst FMVA® Designation. CFI is on a mission to enable anyone to be a great financial analyst and have a great career path. In order to help you advance your career, CFI has compiled many resources to assist you along the path.
In order to become a great financial analyst, here are some more questions and answers for you to discover:
Take your learning and productivity to the next level with our Premium Templates.
Upgrading to a paid membership gives you access to our extensive collection of plug-and-play Templates designed to power your performance—as well as CFI's full course catalog and accredited Certification Programs.
Already have a Self-Study or Full-Immersion membership? Log in
Access Exclusive Templates
Gain unlimited access to more than 250 productivity Templates, CFI's full course catalog and accredited Certification Programs, hundreds of resources, expert reviews and support, the chance to work with real-world finance and research tools, and more.