# Earned value analysis description

All you ever wanted to know about earned value analysis

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ACWP

BCWP

BCWS

CV =

CPI =

= SV

= SPI

Minus

Divided By

Minus

Divided By

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 IF ACWP>BCWP ACWP=BCWP ACWP 0 CPI > 1 The Project is Over Budget On Budget Under Budget

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 IF BCWS>BCWP BCWS =BCWP BCWS 0 SPI > 1 The Project is Behind Schedule On Schedule Ahead of Schedule

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• EV – Previously called BCWP or Budgeted Cost of Work Performed, Earned Value or actual work.
• PV – Previously call BCWS or Budgeted Cost of Work Scheduled, Planned Value or the project budget.
• AC – Previously called ACWP or Actual Cost of Work Performed, Actual Costs
• CV – Cost Variance = BCWP – ACWP
• SC – Schedule Variance = BCWP – BCWS
• CPI – Cost Performance Index = BCWP/ACWP
• SPI – Schedule Performance Index = BCWP/BCWS
• EAC – Estimate At Completion, a forecast of most likely total project cost based upon project performance and risk.

Schedule = Original Schedule/SPI

Cost = Min: Original Budget/CPI or Max: Original Budget/(CPI * SPI)

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• BAC – Budgeted at Completion = Σ of all the budgets (PV or BCWS)
• VAC – Variance at Completion = BAC – EAC
• ETC – Estimate to Complete = EAC – AC

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• Value of the future of fund available today

FV = PV * (1 + i) n

• If you have \$1,000 invested for three years at 10% how much will you have at the end of year three?

EOY 1 = \$1,000 * (1 + 10%) = \$1,100

EOY 2 = \$1,100 * (1 + 10%) = \$1,210

EOY 3 = \$1,210 * (1 + 10%) = \$1,331

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PV = FV / (1 + i)n

• If you want \$1,000 in three years, how much do you have to invest today at 8% to receive your \$1,000?

EOY 1 = \$1,000 / (1 + 10%) = \$925.93

EOY 2 = \$925.93 / (1 + 10%) = \$857.34

EOY 3 = \$857.34 / (1 + 10%) = \$793.83

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• Net Present Value – Present Value minus present cost.
• Internal Rate of Return – Average rate of return earned over the life of the project. It is where discounted cash flow minus up front cost equals zero.

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PERT

Weighted

Average

=

Optimistic + 4XMost Likely + Pessimistic

6

PERT

Standard

Deviation

=

Optimistic – Pessimistic

6

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