EVM earned value management is the core of planning, scheduling, and reporting it is essential for planning engineers and recommended for other engineers to understand the EVM tools and techniques in the control costs process. When you use EVM formulas, you’re measuring and analyzing how far off your project is from your plan.

Take a look at the 9 formulas to understand how to evaluate a project based on earned value management go through the definitions and formulas one by one it is very easy and most projects are using EVM to report the progress of the project and evaluate the work performance.

1- BAC- Budget at Completion:

Formula: Budget at Completion (BAC): No formula – it’s the project budget.

What it says: How much money will you spend on the project?

Why you use it: To tell the sponsor the total amount of value that he’s getting for the project.

2- PV- Planned Value:

Formula: Planned Value (PV) = budget at Completion (BAC) x Planned % Complete.

What it says: The amount of money you should have spent as per your schedule.

Why you use it: To figure out what value your plan says you should have delivered so far.

3- EV-Earned Value:

Formula: Earned Value (EV) = budget at Completion (BAC) x Actual% Complete.

What it says: How much of the project’s value you’ve earned.

Why you use it: EV lets you translate how much work the team has finished into a dollar value.

4- AC-Actual Cost:

Formula: Actual Cost (AC) = No formula What you’ve spent on the project.

What it says: How much you’ve spent so far.

Why you use it: The amount of money you spend doesn’t always match the value you get.

5- SPl- Schedule Performance Index:

Formula: Schedule Performance Index (SPl) =Earned Value (EV) / Planned Value (PV).

What it says: Whether you’re behind or ahead of schedule.

Why you use it: To figure out whether you’ve delivered the value your schedule said you would.

6- SV- Schedule Variance:

Formula: Schedule Variance (SV) =Earned Value (EV) – Planned Value (PV).

What it says: How much ahead or behind schedule you are.

Why you use it: This puts a dollar value on exactly how far ahead or behind schedule you are.

7- CPI- Cost Performance Index:

Formula: Cost Performance Index (CPI) =Earned Value (EV) / Actual Cost (AC).

What it says: Whether you’re within your budget or not.

Why you use it: Your sponsor is always most interested in the bottom line!

8- TCPI- To Complete Performance Index:

Formula: To Complete Performance Index (TCPI) =(Budget at Completion (BAC) – Earned Value (EV) ) / (Budget at Completion (BAC) -Actual Cost (AC) )

What it says: How well your project must perform to stay on budget.

Why you use it: This will let you forecast whether or not you can stick to your budget.

9- CV- Cost Variance:

Formula: Cost Variance (CV) = Earned Value (EV)  -Actual Cost (AC)

What it says: How much above or below your budget you are

Why you use it: Your sponsor needs to know how much it costs to get him the value you deliver.

Note: If the “Schedule Performance Index SPI” is below 1, then your project is behind schedule. But if you see a “Cost Performance Index CPI” under 1, your project is over budget

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