What do EV, AC and PV mean?
EV measures completed work at its budgeted value, AC measures actual spending and PV measures the budgeted work planned by the status date. Keep all three values tied to the same reporting point. PMI’s earned-value explanation sets out these relationships.
EV is not money received from a customer or a rough feeling that work is nearly done. It uses the project’s agreed way of measuring completed work. AC is not the approved total budget, and PV is not the final value of the whole project.
In the example below, planned work was valued at $60,000, completed work at $48,000 and actual spending at $64,000. The labels matter more than the order in which the numbers appear.
Scroll sideways to see every column.
| Measure | Meaning | Example |
|---|---|---|
| PV | Budgeted value planned by today | $60,000 |
| EV | Budgeted value of work completed | $48,000 |
| AC | Actual spending by today | $64,000 |
How do I calculate CPI and SPI?
Divide EV by AC for CPI and EV by PV for SPI. In the example, CPI is 48,000 ÷ 64,000 = 0.75, and SPI is 48,000 ÷ 60,000 = 0.80.
CPI below 1 means the work completed has cost more than its budgeted value. SPI below 1 means less budgeted work has been completed than planned by that date. Values above 1 indicate the opposite relationship; exactly 1 means the two compared values match.
Start both ratios with EV. Then choose the denominator from the question: actual cost for cost efficiency, planned value for schedule performance. If a denominator is zero, the ratio is not defined; do not manufacture a number.
Scroll sideways to see every column.
| Calculation | Working | Interpretation |
|---|---|---|
| CPI | 48,000 ÷ 64,000 = 0.75 | Cost efficiency is below plan |
| SPI | 48,000 ÷ 60,000 = 0.80 | Completed budgeted work is below plan |
How do I calculate CV and SV?
Subtract AC from EV for CV and PV from EV for SV. The example gives CV = 48,000 − 64,000 = −16,000 and SV = 48,000 − 60,000 = −12,000. Both are unfavorable in this example.
These variances are expressed in the same money units as the inputs. SV of −12,000 does not mean twelve thousand days late. It describes a difference in budgeted work value. Use the schedule model to understand time effects.
A helpful check is to compare signs with ratios. CPI below 1 should agree with negative CV when the cost values are positive. SPI below 1 should agree with negative SV when planned value is positive.
Does an SPI below 1 prove the finish date will slip?
No. SPI below 1 shows a shortfall in completed budgeted work relative to plan, but it does not by itself identify the project’s finish-date delay. The affected activities, dependencies and remaining work matter.
A noncritical task might be behind while enough float remains to protect completion. A small delay on a critical activity may be more important to the finish date. Read the critical-path guide before turning an earned-value ratio into a calendar forecast.
The ratio is a signal to investigate. It is not permission to promise a new date, compress every activity or change a baseline without the relevant analysis and authority.
How should I answer earned-value questions that ask what to do next?
Use the numbers to diagnose the relationship, then assess causes and response options in the question’s context. A calculation and a management action are different parts of the answer.
Check whether the question asks for an index, an interpretation, a forecast under stated assumptions or a next step. Don’t use a remembered forecast formula when the scenario supplies a different assumption.
PMP Exam Coach’s earned-value lab is designed to connect the inputs, calculation and interpretation. Preview the calculation tools and use the original reasoning check below to test the distinction.
