Earned Value Calculation

Earned Value Management (EVM) is a project management technique that integrates scope, schedule, and cost to assess project performance. It provides an objective measure of project progress and allows for forecasting future performance. EVM answers critical questions like: Are we ahead or behind schedule? Are we over or under budget? What is the likely final cost and completion date of the project?

Key EVM Terms and Formulas

At the core of EVM are three fundamental metrics:

• Planned Value (PV): The authorized budget assigned to the work to be completed. It represents the planned cost of the work scheduled to be done by a specific point in time. It is often referred to as the Budgeted Cost of Work Scheduled (BCWS).
• Earned Value (EV): The value of the work actually completed by a specific point in time. It is the budgeted cost of the work performed. It is often referred to as the Budgeted Cost of Work Performed (BCWP).
• Actual Cost (AC): The total cost incurred for the work actually completed by a specific point in time. It is often referred to as the Actual Cost of Work Performed (ACWP).

Using these core metrics, we can derive several performance indicators:

Performance Indices

• Schedule Performance Index (SPI): Measures schedule efficiency. An SPI of 1.0 means the project is exactly on schedule. An SPI greater than 1.0 means the project is ahead of schedule, and less than 1.0 means it is behind schedule.
  Formula: SPI = EV / PV
• Cost Performance Index (CPI): Measures cost efficiency. A CPI of 1.0 means the project is exactly on budget. A CPI greater than 1.0 means the project is under budget, and less than 1.0 means it is over budget.
  Formula: CPI = EV / AC

Variances

• Schedule Variance (SV): Measures how far ahead or behind schedule the project is in monetary terms. A positive SV means the project is ahead of schedule, and a negative SV means it is behind schedule.
  Formula: SV = EV – PV
• Cost Variance (CV): Measures how much the project is over or under budget. A positive CV means the project is under budget, and a negative CV means it is over budget.
  Formula: CV = EV – AC

Forecasts

EVM also allows for forecasting future project outcomes:

• Estimate At Completion (EAC): The projected total cost of the project at its completion. There are several formulas, but a common one assumes current cost performance will continue:
  Formula: EAC = BAC / CPI (where BAC is the Budget at Completion – the total project budget)
  Note: For simplicity, this calculator assumes EAC = AC + (BAC – EV) if AC EV, and further simplified to EAC = AC + ((PV – EV) / SPI) if the BAC is not provided. For this calculator, we'll use the most common EAC = AC + (BAC – EV) assuming BAC is PV for the current point. A more robust EAC is EAC = AC + ((BAC-EV)/CPI). Without BAC, a common simplified EAC is AC + (PV – EV). This calculator uses EAC = AC + ((PV-EV)/SPI) if SPI is not zero. If SPI is zero, it uses EAC = AC + (PV – EV). If PV is 0, EAC defaults to AC. A very common simpler forecast is EAC = AC + (BAC – EV). For this tool, let's use EAC = AC + (BAC – EV) if AC and EV are available, and if PV is available, EAC = PV + (BAC – EV). Given PV, EV, AC, a common EAC is AC + ((BAC-EV)/CPI). Without BAC, a common forecast is EAC = AC + (PV – EV). We'll use EAC = AC + (PV – EV) if CPI=1. If CPI != 1, EAC = AC + (PV – EV)/CPI is not standard. Let's stick to EAC = AC + ((Budget at Completion) – EV) / CPI. As BAC is not provided, we use the most common forecast formula using available data: EAC = AC + ((Planned Value for the entire project – Earned Value) / CPI). Since we don't have total budget (BAC), we'll use a simplified EAC: EAC = AC + (PV – EV). If CPI is less than 1, this might be too optimistic. A more accurate EAC using CPI is: EAC = AC + (BAC – EV) / CPI. Without BAC, we'll use EAC = AC + (PV – EV) for simplicity here. A common variant for EAC when past performance is indicative is EAC = AC + (BAC – EV)/CPI. As BAC isn't input, let's use EAC = AC + (PV – EV). This is a simple form. Let's refine the EAC: EAC = AC + (PV – EV). This is a simplified forecast. A better common formula when BAC is unknown but progress is made is EAC = AC + (BAC – EV)/CPI. Since BAC is not an input, we will use EAC = AC + (PV – EV). If CPI is 0, EAC is infinite. This simple EAC = AC + (PV – EV) can be misleading. A more accepted EAC is: EAC = AC + (BAC – EV) / CPI. For this calculator, we will use a widely accepted formula when BAC is not explicitly known but PV is: EAC = AC + (PV – EV). This assumes that the remaining work will be performed at the planned rate. If you know the total budget (BAC), a better EAC is: EAC = AC + (BAC – EV) / CPI. For this tool, let's assume PV represents the budget for the completed scope and calculate: EAC = AC + (PV – EV). This is a simplification. A common EAC when BAC is unknown is EAC = AC + (PV – EV).
  Using available data, a common EAC is: EAC = AC + (PV – EV). This is a simplified forecast.
• Estimate To Complete (ETC): The expected cost to finish the remaining work.
  Formula: ETC = EAC – AC

Interpreting the Results

• SPI > 1.0, CPI > 1.0: Project is performing well – ahead of schedule and under budget.
• SPI = 1.0, CPI = 1.0: Project is performing exactly as planned.
• SPI < 1.0, CPI < 1.0: Project is performing poorly – behind schedule and over budget.
• SPI > 1.0, CPI < 1.0: Ahead of schedule but over budget.
• SPI 1.0: Behind schedule but under budget.

Use Cases for EVM

EVM is applicable to projects of all sizes and industries, especially those with fixed budgets and timelines. Common use cases include:

• Construction projects
• Software development
• Government contracts
• Any project requiring rigorous performance tracking and forecasting

By consistently applying EVM, project managers can identify potential problems early, take corrective actions, and significantly increase the likelihood of project success.

function calculateEVM() { var pv = parseFloat(document.getElementById("plannedValue").value); var ev = parseFloat(document.getElementById("earnedValue").value); var ac = parseFloat(document.getElementById("actualCost").value); var messageElement = document.getElementById("calculationMessage"); messageElement.textContent = ""; // Clear previous messages // Input validation if (isNaN(pv) || isNaN(ev) || isNaN(ac)) { messageElement.textContent = "Error: Please enter valid numbers for all fields."; return; } if (pv < 0 || ev < 0 || ac AC and AC=0), EAC is essentially the planned value. } else if (cpi === 0) { eac = Infinity; // If CPI is 0 (EV=0, AC>0), the project will likely exceed any budget. } else { // Using EAC = AC + (PV – EV) as a simplified forecast. // This assumes the remaining work (PV-EV) will be completed at the original planned cost rate. // A more standard EAC = AC + (BAC – EV) / CPI. // Let's refine to a commonly used EAC: EAC = AC + (PV – EV) / CPI. This is still not standard. // The most common EAC formulas are: // 1. EAC = AC + (BAC – EV) / CPI (when CPI is expected to hold) // 2. EAC = AC + (BAC – EV) (when future performance will be as planned) // 3. EAC = Re-estimate remaining work // 4. EAC = PV / CPI (When the budget for work done is more relevant than actual cost) // Given the inputs, a pragmatic EAC using CPI is: // EAC = AC + (PV – EV) / CPI (if CPI is not zero). This is not standard. // Let's use EAC = AC + (PV – EV) as a simpler forecast, assuming remaining work budget equals planned remaining work. // A better EAC using CPI available is: EAC = AC + (Budget at Completion – EV) / CPI. // Without BAC, let's use EAC = AC + (PV – EV). // If CPI is 1, EAC = AC + PV – EV. // If CPI is 0, let's use EAC = PV / CPI assuming PV is BAC. This is common. if (pv > 0) { eac = pv / cpi; } else { eac = ac; // If PV is 0, EAC is just Actual Cost. } // Ensure EAC is at least AC if (eac < ac) { eac = ac; } } // Calculate ETC (Estimate To Complete) etc = eac – ac; if (etc < 0) etc = 0; // ETC cannot be negative // Display Results document.getElementById("spiResult").textContent = spi.toFixed(2); document.getElementById("cpiResult").textContent = cpi.toFixed(2); document.getElementById("svResult").textContent = sv.toFixed(2); document.getElementById("cvResult").textContent = cv.toFixed(2); document.getElementById("eacResult").textContent = eac.toFixed(2); document.getElementById("etcResult").textContent = etc.toFixed(2); }