Q:

What is the formula for calculating earned value?

A:

Quick Answer

The formula for earned value is EV = PC x BAC, in which EV stands for the earned value, PC is the percent complete and BAC is the budget at completion. This formula determines what the estimated value of a project is at different points prior to its completion.

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Full Answer

EV is a critical number for project management and accounting purposes, as it is used in several other calculations, including cost variance, schedule variance, cost performance index, schedule performance index and to complete performance index. Measuring EV helps project managers prevent cost overruns and find trouble spots in an ongoing project.

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