Net present value and the profitability index are helpful tools that allow investors and companies make decisions about where to allocate their money for the best return. Net present value tells us ...

Investors and financial analysts often rely on the profitability index (PI) to determine whether the benefits of an investment opportunity outweigh its costs. Essentially, the PI compares projected ...

Businesses often use profitability ratios to gauge their performance against industry benchmarks or competitors. Calculating these ratios involves a straightforward process, typically using figures ...

One way to determine profitability is to calculate the ratio of profits to other financial metrics, such as sales, assets or equity. Common profitability measures include the net income margin, which ...

Our profitability index metric looks at a firm's ability to convert revenue into profits. This metric, introduced in 1985, seeks to demonstrate which firms best balance leverage and profit margin for ...