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 ...

To determine the profitability of banks, simply looking at the earnings per share isn't quite enough. It's also important to know how efficiently a bank is using its assets and equity to generate ...

This metric, introduced in 1985, seeks to demonstrate which firms best balance leverage and profit margin for the highest possible profits per partner. We calculate the profitability index by dividing ...

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

Claire Boyte-White is the lead writer for NapkinFinance.com, co-author of I Am Net Worthy, and an Investopedia contributor. Claire's expertise lies in corporate finance & accounting, mutual funds, ...

Models allow you to forecast the profitability of your company, but you have to choose the most appropriate model to get the most accurate results. The choice of model depends on your company ...