Earned Value Analysis

Cheat Sheet

Everything you need to know about Earned Value Analysis

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"Once you’re 20% into
a project, your current
performance can be
used to predict the
future of the project
with a plus or minus
10% deviation.
Fleming and Koppelman

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 About The Author

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and analysis of data can transform global project
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After 8 years in the rail industry struggling with paper

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was a better way.

In 2017 I founded Raildiary. We are the market leader in

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William Doyle - MRICS

CEO Raildiary

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 Earned Value Analysis Cheat Sheet
Budgeted Cost of
Work Scheduled
BCWS = % Complete (Planned) x
Project Budget
Budgeted Cost of
Work Performed
Budgeted cost of the value of work
that has actually been completed
to date. Also called earned Value
Schedule Variance
SV = EV – PV = BCWP – BCWS
Positive SV: Indicates ahead of
schedule
Negative SV: Indicates behind
schedule
Cost Performance
Index
CPI = EV /AC = BCWP / ACWP
CPI ≥1: very efficient utilisation
CPI ≤1: less efficient utilisation
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Actual Cost of Work
Performed
AC is the “the realised cost
incurred for the work performed
during a specific time period”.
Cost Variance
CV = EV - AC = BCWP – ACWP
Positive CV = Under budget
Negative CV = Over budget the
project
Schedule
Performance Index
SPI = EV / PV = BCWP / BCWS
SPI ≥1: very efficient utilisation
SPI ≤1: less efficient utilisation
Cost Schedule Index
CSI = CPI x SPI
The farther the CSI is from 1.0, the
more unlikely a project that is late
and/or over budget is to recover.
 10 Earned Value Analysis
Essentials

EVA or Earned Value Analysis is an industry accepted standard

methodology to provide consistent, numerical indicators for the
evaluation and comparison of projects.
It focuses on three areas;
1. Measuring project progress
2. Forecasting a projects completed date and final costs
3. Understanding schedule and budget variances as a project
progresses
Various calculations and terms are part and parcel of this process,
here is a list of the 10 things you really need to know about Earned
Value Analysis:

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10 Earned Value Analysis Essentials
1. What is the purpose of EVA?
According to a detailed study by Fleming and Koppelman, once you’re 20% into a project, your
current performance can be used to predict the future of the project with a plus or minus 10%
deviation.

Earned value analysis builds on this to compare the planned work with what has actually been
completed to determine if cost, schedule and work accomplished are progressing as planned.

2. BCWS - Budgeted Cost of Work Scheduled

Budgeted Cost of Work Scheduled (BCWS), also called the Planned Value (PV), is the sum of the
budget for all work scheduled to be accomplished with a given time period. It also includes the cost
of previous work completed and can address a specific period of performance or a date in time.

BCWS = % Complete (Planned) x Project Budget

A Contractor usually reports the Budgeted Cost or Work Performed (BCWP) on all work packages
completed for a project. The BCWP is then compared to BCWS to determine if the project is behind
or ahead of where it’s projected to be. If the contractor has not completed all the scheduled work
packages on time, then the BCWP will be less than the BCWS.

Worked Example

PV = Total project cost * % of planned work

Example 10 month project is £100,000.

PV for the completed project = £100,000

PV at 2 months = £100,000 * 20% = $20,000

PV can also be calculated for a period of time, month 3-6 inclusive = £100,000 * 40% = £40,000.

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3. ACWP - Actual Cost of Work Performed
The Project Management Institute defined Actual Cost of Work Performed as “the realised cost
incurred for the work performed during a specific time period”.

The ACWP is reported by the contractor’s accounting system in accordance with generally accepted
accounting procedures and is simply stated actuals are actuals.

ACWP can be considered both cumulatively or for a given period of time.

The difference between the BCWP and the ACWP is the Cost Variance (CV).

Worked Example

Assume ACWP or AC = £70,000

4. BCWP - Budgeted Cost of Work Performed

The budgeted Cost of Work Performed (BCWP) is the budgeted cost of the value of work that has
actually been completed to date.

Otherwise known as the Earned Value (EV).

Contractors usually report the BCWP on individual packages within a project and compare it to
Budgeted Cost of Work Scheduled (BCWS) to understand if a project or package is being or ahead of
where it was projected to be .

If the contractor has not completed all the scheduled work packages on time, then the BCWP will be
less than the BCWS.

Worked Example

BWCP or EV = Total Project cost * % of actual work complete = £100,000 * 55% = £55,000.

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5. SV - Schedule Variance (BCWP-BCWS)
Schedule Variance (SV) indicates how much ahead or behind schedule the project is. It measures
whether a project is on track by calculating actual progress against expected progress

Schedule Variance can be calculated using the following formula:

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

Schedule Variance (SV) = BCWP – BCWS

This variance indicates how much cost of the work is yet to be completed as per schedule or how
much cost of work has been completed over and above the scheduled cost.

Positive Schedule Variance: Indicates we are ahead of schedule

Negative Schedule Variance: Indicates we are behind schedule

Worked Example

SV = BCWP - BCWS

SV = £55,000 - £60,000

SV = -£5000

SV% = SV / BCWS

This indicates that the project is 8% behind schedule.

6. CV - Cost Variance (BCWP-ACWP)

Cost Variance (CV) indicates how much over or under budget the project is.

It is used to track expense line items, but can also be tracked at the project level, as long as there is a
budget allocated to the item.

Cost Variance can be calculated using the following formulas:

Cost Variance (CV) = Earned Value (EV) – Actual Cost (AC)

Cost Variance (CV) = BCWP – ACWP

Positive = indicates how much under budget the project

Negative = indicates how much over budget the project

Worked Example

CV = EV – AC

CV at 6 months = £55,000 – £70,000 = -£15,000

CV% = (CV/EV) *100 = (-£15000/£55,000) *100 = -27%

This implies that we are 27% over budget.

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7. SPI - Schedule Performance Index
SPI reviews the project performance from a schedule perspective and can be calculated using the
following formula:

SPI = Earned Value (EV) / Planned Value (PV)

SPI = BCWP / BCWS

SPI value greater than (≥) 1: indicates the project team is very efficient in utilising the time allocated
to the project

SPI value less than (≤) 1: indicates the project team is less efficient in utilising the time allocated to
the project

Worked Example

SPI = BCWP / BCWS

SPI = £55,000 / £60000

SPI = 0.92

This indicates that the project is only 92% as per the original plan or is 8% behind schedule.

8. CPI - Cost Performance Index

Cost Performance Indicator can be calculated as using the following formulas:

CPI = Earned Value (EV) /Actual Cost (AC)

CPI = BCWP / ACWP

CPI is an index showing the efficiency of the utilisation of the resources on the project.

Greater than (≥) 1 indicates efficiency in utilising the resources allocated to the project is good.

Less than (≤) 1: indicates efficiency in utilising the resources allocated to the project is not good.

Worked Example

CPI = BCWP / ACWP

CPI = £55,000 / £70,000

CPI = 0.79

0.79 indicating the project expenditures are at 79% of the plan.

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 9. CSI - Cost Schedule Index
If a project is slipping on programme or likely to over spend then the Cost Schedule Index is a
valuable measurement to consider. It measures the project’s overall efficiency and indicates how
likely a project that’s deviating from baselines is to recover.

It’s calculated as:

Cost Schedule Index (CSI) = Cost Performance Index (CPI) x Schedule Performance Index (SPI)

The farther the CSI is from 1.0, the more unlikely a project that is late and/or over budget is to
recover.

Worked Example

CSI = CPI * SPI

CSI = 0.79 * 0.92

CSI = 0.72

10. EAC - Estimate at Completion

Estimate at completion is the forecasted cost of the project, as the project progresses. There are a
number of different ways to determine the EAC.

The most common way to determine EAC is a “bottom-up” approach where the actual costs (AC) are
added to the forecasted remaining – the estimate to complete (ETC).

EAC = Actual costs (AC) + estimate to complete (ETC)

Alternatively, if the project has recurring variances then the following formula is recommended:

EAC = Budget at Completion (BAC) ÷ Cost Performance Index (CPI)

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