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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 percent complete by the total project budget. For example, let’s say you’re 60% done, and your project budget is \$100,000, then your earned value is \$60,000. However, to properly use earned value, a few additional calculations must be considered. The largest benefits of earned value results 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 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 so far and what your actual costs to date are. 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 there is 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. 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. Using SPI is different than simply comparing your progress against your baseline.