Financial
Earned Value Management (EVM) formulas: EV, PV, CPI, SPI, and EAC
Distinguish true physical progress from raw budget burn using Cost Performance Index (CPI = EV / AC), Schedule Performance Index (SPI = EV / PV), and EAC.
Why comparing Actual Spend vs Planned Budget alone hides cost overruns!
At BAC=$200,000, planned budget-weighted progress 50% and earned progress 45%, PV=$100,000 and EV=$90,000. With AC=$100,000, both cost variance and schedule variance are -$10,000 in budget-value terms.
CPI and SPI are 0.90. EAC=BAC/CPI projects $222,222.22 only if the same cost efficiency continues.
| EVM Metric (BAC = $200k, Plan 50%, Done 45%, AC = $100k) | Formula | Result |
|---|---|---|
| Planned Value (PV) & Earned Value (EV) | BAC*50% / BAC*45% | $100,000 / $90,000 |
| Cost Performance Index (CPI) | =EV / AC = 90k / 100k | 0.90 (Over budget < 1.0) |
| Schedule Performance Index (SPI) | =EV / PV = 90k / 100k | 0.90 (Behind schedule < 1.0) |
| Estimate at Completion (EAC) | =BAC / CPI = 200k / 0.90 | $222,222.22 |
CPI, SPI, and Estimate at Completion (EAC) formulas
A ratio of 1 means performance matches the baseline; above or below 1 needs interpretation in the project context.
=ROUND((A2 * C2) / D2, 4)Estimate at Completion (EAC = BAC / CPI)
Projects final total cost assuming remaining work continues at historical CPI efficiency.
=ROUND(A2 / ((A2 * C2) / D2), 2)Additional worked calculation
Using the initial example inputs:
=ROUND((A2 * C2) / (A2 * B2), 4)Inputs and interpretation
Earned value is budgeted value of completed work. Multiplying BAC by a completion percentage assumes that percentage is budget-weighted. Require positive BAC and actual cost; SPI needs positive planned value and EAC needs positive earned value. Cost and schedule variances are currency measures, not a forecast dollar overrun or number of days late. EAC= BAC/CPI assumes the same future cost efficiency.
Try the example
Use the original values or change them to test your understanding.