Project Management Guide
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# How to Calculate Earned Value in Project Management

Earned value (EV) is a way to measure and monitor the level of work completed on a project against the plan. Simply put, it’s a quick way to tell if you’re behind schedule or over budget on your project. You can calculate the EV of a project by multiplying the percentage complete by the total project budget. For example, let’s say you’re 60% done, and your project budget is \$100,000 — your earned value is then \$60,000. However, to properly use earned value, a few additional calculations must be considered. The largest benefits of earned value result from completing both cost and schedule variance analyses.

### Earned value calculations in project management

1. Schedule Variance (SV): Schedule variance is the difference between your planned progress and your actual progress to date. The SV calculation is EV (earned value) - PV (planned value). Let’s assume you have a four-month-long project, and you’re two months in, but the project is only 25% complete. In this case, your EV = 1 months (25% of four months), and your PV = 2 months. Therefore your SV is 1 - 2 = -1. Since the number is negative, it indicates you’re behind schedule.
2. Cost Variance (CV): Similar to SV, cost variance is the difference between how much you planned on spending thus far and your actual costs to date. The CV calculation is: CV = EV - AC (actual cost). Let’s use the earlier example. Your project budget is \$100,000 and you’re 60% done, which means your EV is \$60,000. If you’ve spent \$70,000 so far to get to this point in the project, your CV is -\$10,000. You can tell you’re over budget because the number is negative, which may indicate a problem with the project or that the project could go over budget or run out of money.
3. Schedule Performance Index (SPI): This measure is similar to SV but is often preferred as it translates the numbers into a value that is easily compared across tasks or projects. The SPI calculation is: SPI = EV/PV. When SPI is above 1.00, you’re ahead of schedule. If it’s below 1.00, you’re behind. To take the example from above, SPI would be 1/2 = 0.5. 