All EVM calculations follow the PMBOK standard. Here are the core formulas:

• CV = EV − AC  (positive = under budget)
• SV = EV − PV  (positive = ahead of schedule)
• CPI = EV ÷ AC  (above 1 = under budget)
• SPI = EV ÷ PV  (above 1 = ahead of schedule)
• EAC = BAC ÷ CPI  (most common method)
• ETC = EAC − AC
• VAC = BAC − EAC
• TCPI = (BAC − EV) ÷ (BAC − AC)
• % Complete = EV ÷ BAC × 100

Earned Value Management (EVM) is a structured way to measure project performance. It connects three key data points: how much work was planned, how much work was actually done, and how much it cost to do it.

Originally developed for US government contracts in the 1960s, EVM is now part of the PMBOK Guide and is used by project managers in construction, IT, aerospace, and many other industries worldwide.

The core idea is simple: comparing what you planned to spend with what you actually spent tells you how efficient you are — and lets you forecast whether the project will finish on time and within budget. For businesses tracking financial efficiency beyond project scope, the profit margin calculator is a useful companion tool.

CPI (Cost Performance Index) tells you how much value you are getting per unit of money spent. CPI = 1.0 means exactly on budget. CPI = 0.80 means you are getting only 80 cents of value for every dollar spent — meaning you will overspend unless performance improves.

SPI (Schedule Performance Index) tells you how efficiently the project is moving through planned work. SPI = 1.0 means exactly on schedule. SPI = 0.75 means you have only finished 75% of the work you should have by now.

Together, CPI and SPI give a clear picture of project health — and they feed directly into the EAC forecast for final cost.

There are four common ways to estimate the final project cost (EAC). Each suits different situations:

• BAC ÷ CPI: Assumes current spending efficiency continues. Best when cost overruns are systematic.
• BAC ÷ (CPI × SPI): Factors in both cost and schedule inefficiency. Used when the project is both over budget and behind schedule.
• AC + (BAC − EV): Assumes remaining work is done at the original planned rate. Used when past performance was unusual and won't repeat.
• AC + (BAC − EV) ÷ CPI: Assumes remaining work follows the same CPI as today. Balances past performance with remaining scope.

When evaluating vendor or contractor options as part of your cost planning, a pricing comparison can help you choose the most cost-effective option before committing budget.

TCPI (To-Complete Performance Index) answers the question: "How efficiently must we use the remaining budget to hit our cost target?"

TCPI = (BAC − EV) ÷ (BAC − AC)

If TCPI = 1.0, you need to perform exactly as planned for the rest of the project. If TCPI = 1.2, you need to be 20% more efficient than you have been — which is often unrealistic. A TCPI above 1.1 is a warning sign that the budget target may not be achievable.

TCPI is one of the most overlooked but most important EVM metrics for project forecasting and recovery planning. If you manage budgets across multiple projects or departments, explore our full set of company calculators for broader financial planning tools.