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PMP Earned Value Management: Study Guide & Exam Tips
Earned value management (EVM) integrates project scope, schedule, and cost so you can measure current performance and forecast the final result. For the PMP exam, start every calculation by identifying PV, EV, AC, and BAC; then choose the formula that answers the question. The three fundamental EVM values are: Planned Value (PV), the authorized budget for scheduled work, Earned Value (EV), the value of completed work measured against the budget, and Actual Cost (AC), the actual expenditure for completed work. From these, you derive variances and indices: Cost Variance (CV = EV - AC), Schedule Variance (SV = EV - PV), Cost Performance Index (CPI = EV / AC), and Schedule Performance Index (SPI = EV / PV). Choose an Estimate at Completion (EAC) formula that matches the forecast assumptions: EAC = BAC / CPI when current cost efficiency continues; EAC = AC + (BAC - EV) when the past cost variance is not expected to recur and remaining work can use the original budget rate; EAC = AC + bottom-up ETC when remaining work is re-estimated; and EAC = AC + (BAC - EV) / (CPI × SPI) when both cost and schedule performance are assumed to affect remaining cost. Estimate to Complete is ETC = EAC - AC, and Variance at Completion is VAC = BAC - EAC. To-Complete Performance Index (TCPI) measures the cost efficiency needed for the remaining work against a selected target: (BAC - EV) / (BAC - AC), or (BAC - EV) / (EAC - AC). Common traps include misapplying EAC formulas, each assumes different conditions. Negative variance always means unfavorable (over budget or behind schedule). CPI and SPI below 1.0 are bad; above 1.0 are good. Another trap is confusing schedule variance (in cost terms) with actual schedule delay, SV is measured in monetary units, not time. Practice EVM questions on PMP Exam Lab. Work through calculation scenarios methodically: identify given values, select the correct formula, and interpret the result. Speed with EVM formulas comes from repetition.
Free EVM calculator
Enter BAC, PV, EV, and AC. The calculator applies the common “current cost efficiency continues” assumption for EAC = BAC ÷ CPI. Results are study aids, so always select the forecast formula that matches the scenario.
Formula reference: NSF Earned Value Management Gold Card. All amounts must use the same units. Schedule indices describe earned-value progress, not the critical-path finish date.
| Metric | Formula | Result | Interpretation |
|---|---|---|---|
| Cost Variance (CV) | EV − AC | -$18,000 | Over budget |
| Schedule Variance (SV) | EV − PV | -$8,000 | Behind plan |
| Cost Performance Index (CPI) | EV ÷ AC | 0.80 | Unfavorable cost efficiency |
| Schedule Performance Index (SPI) | EV ÷ PV | 0.90 | Unfavorable schedule efficiency |
| Estimate at Completion (EAC) | BAC ÷ CPI | $250,000 | If current cost efficiency continues |
| Estimate to Complete (ETC) | EAC − AC | $160,000 | Forecast remaining cost |
| Variance at Completion (VAC) | BAC − EAC | -$50,000 | Forecast over budget |
| To-Complete Performance Index (TCPI) | (BAC − EV) ÷ (BAC − AC) | 1.16 | Higher future efficiency required |
Which EAC formula fits the scenario?
The same inputs can produce different estimates at completion. Choose the assumption supported by the scenario, rather than selecting the lowest estimate. These forecasts update with your inputs.
Current cost efficiency continues
BAC ÷ CPI
EAC: $250,000
Use when the cost efficiency measured so far is expected to continue for the remaining work.
Remaining work returns to planned cost efficiency
AC + (BAC − EV)
EAC: $218,000
Use when the earlier cost variance is an isolated event and the remaining work can be completed at its budgeted cost. The cost already spent stays in the estimate.
Cost and schedule efficiency affect remaining cost
AC + (BAC − EV) ÷ (CPI × SPI)
EAC: $267,778
Use when both indices are justified predictors of remaining cost. A low SPI alone does not establish that schedule performance will increase cost.
If the remaining work has been re-estimated, use AC + the new bottom-up ETC instead. None of these calculations approves a revised budget. A forecast with undefined indices remains undefined; check the inputs and the assumptions before interpreting it.
PMP EVM formulas cheat sheet
PV is the budgeted value of scheduled work, EV is the budgeted value of completed work, AC is the actual cost, and BAC is the total approved budget. Use those four inputs to calculate the remaining indicators and forecasts.
| Metric | Formula | Interpretation |
|---|---|---|
| Planned Value (PV) | Budget × % planned complete | Baseline |
| Earned Value (EV) | Budget × % actual complete | Key metric |
| Actual Cost (AC) | Actual cost spent | Input |
| Schedule Variance (SV) | EV − PV | SV > 0 = ahead |
| Cost Variance (CV) | EV − AC | CV > 0 = under budget |
| SPI | EV / PV | SPI > 1 = ahead of schedule |
| CPI | EV / AC | CPI > 1 = under budget |
| EAC (typical) | BAC / CPI | Forecast at completion |
| EAC (atypical) | AC + (BAC − EV) | If variance is temporary |
| EAC (cost and schedule) | AC + ((BAC − EV) / (CPI × SPI)) | If both variances continue |
| EAC (bottom-up) | AC + bottom-up ETC | Remaining work re-estimated |
| ETC | EAC − AC | Cost to complete |
| VAC | BAC − EAC | VAC < 0 = forecast overrun |
| TCPI (to meet BAC) | (BAC − EV) / (BAC − AC) | Efficiency needed to finish on budget |
| TCPI (to meet EAC) | (BAC − EV) / (EAC − AC) | Efficiency needed for an approved EAC |
Key formulas
CV = EV - AC | SV = EV - PV | CPI = EV / AC | SPI = EV / PV | EAC = BAC / CPI (current cost efficiency continues) | ETC = EAC - AC | VAC = BAC - EAC | TCPI = (BAC - EV) / (BAC - AC). A negative cost or schedule variance is unfavorable. CPI or SPI below 1.0 is unfavorable; TCPI above 1.0 means remaining work needs cost efficiency above the original budget rate.
Tips for practice
Draw the EVM triangle: PV, EV, AC. If EV is above PV, you're ahead of schedule. If EV is above AC, you're under budget. Practice identifying which EAC formula to use based on the scenario description. TCPI > 1.0 means you need to be more efficient than planned to meet the target.
Worked example: interpret CPI and SPI
A project has PV = $80,000, EV = $72,000, and AC = $90,000. CPI = EV / AC = 0.80, so the project earns $0.80 of value for each $1 spent and is over budget. SPI = EV / PV = 0.90, so it is also behind schedule. CV = -$18,000 and SV = -$8,000 confirm both results.
Worked example: forecast EAC
If BAC = $200,000 and CPI = 0.80, and the cost variance is expected to continue, use EAC = BAC / CPI. The forecast is $200,000 / 0.80 = $250,000. VAC = BAC - EAC = -$50,000, which forecasts a $50,000 budget overrun.
EVM vs EMV: two different PMP formulas
EVM (earned value management) measures how a project is performing against its cost and schedule baselines. EMV (expected monetary value) is a risk technique: probability multiplied by impact, used to compare uncertain outcomes or size reserves. Exam questions mix the two up because the acronyms look alike.
- EVM question: "EV is $80,000 and AC is $95,000. What is the CPI?" (0.84)
- EMV question: "A 30% chance of a $50,000 rework cost. What is its EMV?" (−$15,000)
For worked EMV and decision-tree questions, see PMP risk management questions and answers.
Practice Earned Value (EVM) questions with answers in our public collection. All topics are free to practice on one page, with no signup.
Frequently asked questions
- What EVM formulas do I need to know for the PMP exam?
- The essential PMP EVM formulas are: PV (Planned Value), EV (Earned Value), AC (Actual Cost), SV = EV−PV (Schedule Variance), CV = EV−AC (Cost Variance), SPI = EV/PV (Schedule Performance Index), CPI = EV/AC (Cost Performance Index), EAC = BAC/CPI (Estimate at Completion for typical variance), EAC = AC+(BAC−EV) for atypical variance, ETC = EAC−AC (Estimate to Complete), and TCPI = (BAC−EV)/(BAC−AC) (To-Complete Performance Index). Write these on your scratch paper at the start of the exam.
- What is Earned Value (EV) in project management?
- Earned Value (EV) is the budgeted cost of work actually performed. It represents the value of completed work in terms of the approved budget. EV is calculated as: Budget at Completion (BAC) × percentage of work actually completed. EV is the foundation of Earned Value Management, it allows project managers to measure both schedule and cost performance objectively.
- What does a CPI of 0.8 mean on the PMP exam?
- A CPI (Cost Performance Index) of 0.8 means the project is over budget, you are getting $0.80 of value for every $1.00 spent. CPI < 1 indicates cost overrun. On PMP exam questions, a CPI of 0.8 typically triggers the need for corrective action. The Estimate at Completion (EAC) would be recalculated as BAC/CPI to forecast the new total project cost.
- How many EVM questions are on the PMP exam?
- PMI does not publish a topic-level question count for EVM. Prepare for both calculations using EV, AC, PV, and BAC and situational questions that ask you to interpret CPI, SPI, or a forecast. Understanding what each result means is more useful than relying on an unofficial percentage.
- Why does the EVM calculator show Not defined?
- CPI needs actual cost greater than zero, SPI needs planned value greater than zero, and EAC = BAC/CPI needs a positive CPI. These conditions cannot be replaced with a zero result. When actual cost reaches or exceeds BAC, the original budget has no remaining funding for a BAC-based TCPI; reassess the target or calculate against a defensible EAC.
- Does SPI tell me the project's finish date?
- No. SPI compares earned value with planned value in budget units. It does not identify critical-path delays or calculate a calendar finish date. Read it alongside the current schedule and remaining critical work.
- What is the difference between EAC and ETC in PMP?
- EAC (Estimate at Completion) is the expected total cost of the entire project, it includes what has already been spent (AC) plus the expected remaining cost. ETC (Estimate to Complete) is only the expected cost of the remaining work, it does not include what has already been spent. The relationship is: EAC = AC + ETC. On PMP exam questions, EAC is used to forecast the final project cost, while ETC answers 'how much more will it cost to finish?'
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Also practice Cost Management questions, which pairs closely with EVM on the exam. For every other exam calculation (PERT, float, EMV, PTA, velocity), see the full PMP formulas cheat sheet.
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