PMP Earned Value Basics

Earned value questions can look intimidating, but most PMP items test interpretation rather than complex math. If you understand what each number means, the formulas become easier to use.

The core idea is simple: compare planned work, completed work, and actual cost.

The Three Inputs

Planned Value, or PV, is the value of the work that should have been completed by now.

Earned Value, or EV, is the value of the work actually completed.

Actual Cost, or AC, is what you actually spent.

Once you know these three, the common formulas follow naturally.

Cost Variance

Cost Variance tells you whether the project is under or over budget.

CV = EV - AC

If CV is positive, the project is under budget. If CV is negative, the project is over budget.

Example: EV is 80,000 and AC is 90,000.

CV = 80,000 - 90,000 = -10,000.

The project is over budget.

Schedule Variance

Schedule Variance tells you whether the project is ahead of or behind schedule in value terms.

SV = EV - PV

If SV is positive, the project is ahead of schedule. If SV is negative, the project is behind schedule.

Example: EV is 80,000 and PV is 100,000.

SV = 80,000 - 100,000 = -20,000.

The project is behind schedule.

Cost Performance Index

CPI measures cost efficiency.

CPI = EV / AC

If CPI is greater than 1, cost performance is favorable. If CPI is less than 1, the project is spending more than planned for the work completed.

Example: EV is 80,000 and AC is 100,000.

CPI = 0.8.

For every dollar spent, the project earns only 80 cents of planned value.

Schedule Performance Index

SPI measures schedule efficiency.

SPI = EV / PV

If SPI is greater than 1, the project is ahead of schedule. If SPI is less than 1, the project is behind schedule.

Example: EV is 80,000 and PV is 100,000.

SPI = 0.8.

The project is progressing slower than planned.

How the PMP Exam Uses EVM

Many questions ask what the project manager should do after interpreting the numbers. Do not stop at the calculation. Think about the management response.

If performance is poor, the project manager should analyze root causes, review forecasts, determine corrective action, and communicate with stakeholders according to the plan. Jumping immediately to canceling work or blaming the team is usually not the best answer.

Quick Interpretation Table

Metric	Good	Bad
CV	Positive	Negative
SV	Positive	Negative
CPI	Greater than 1	Less than 1
SPI	Greater than 1	Less than 1

Memorize the direction, not just the formula. On exam day, fast interpretation saves time and reduces stress.