In investment evaluations, what does DPI stand for?

DPI stands for Distribution to Paid-In Capital. This metric is crucial in the investment evaluation process, particularly for private equity and venture capital firms. It measures the cash that has been distributed to investors relative to the amount of capital they have contributed.

A high DPI indicates that investors have received substantial returns on their invested capital, which is a positive sign of a fund's performance. It reflects the liquidity and return generation capabilities of an investment and is often used by investors to assess the success of a fund in returning capital. Unlike other measures that may focus on unrealized gains or projected future returns, DPI provides a clear picture of actual cash flows and returns realized by the investors up to that point in time.

In contrast, the other options do not accurately define DPI within the context of private equity investments. Distributions Per Investment lacks specificity regarding the relationship between distributions and paid-in capital. Debt Per Income pertains to financial metrics assessing a company's leverage, and Dynamic Profit Index is not a standard term used in investment evaluations.