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 ...

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 ...

James Chen, CMT is an expert trader, investment adviser, and global market strategist. Gordon Scott has been an active investor and technical analyst or 20+ years. He is a Chartered Market Technician ...

The profitability of a business is relative to the profit of the business and its size. This can be found through formulas that provide insight into the profit margins. The guide covers several ...

NPV calculates profitability by considering all cash flows and the time value of money. A positive NPV indicates a potentially profitable investment opportunity. NPV's effectiveness relies on accurate ...

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 ...