---
title: "Short note: Earned value analysis"
subject: "Project Engineering"
chapter: 4
key: "semester_7/project_engineering:earned-value-analysis-note"
source: https://www.bctengineer.com/q/semester_7/project_engineering/earned-value-analysis-note
site: BCT Engineering
---

# Short note: Earned value analysis

Project Engineering · Chapter 4: Project Implementation and Controlling

- Asked in: 2066 Bhadra (old course), 4 marks
- Video: [Earned Value Analysis: Worked Example](https://www.youtube.com/watch?v=o_BG-wxLGzg) — Tactical Project Manager
- Answer checked by Claude Opus 5.5 (high effort) on 2026-10-14
- Page: https://www.bctengineer.com/q/semester_7/project_engineering/earned-value-analysis-note
- Whole chapter: https://www.bctengineer.com/md/semester_7/project_engineering/chapter-4

## Question

Write a short note on earned value analysis.

## Short answer

Earned value analysis (EVA) compares planned value (PV), earned value (EV), and actual cost (AC) to measure schedule and cost performance. Key metrics include SV, CV, SPI, CPI, and EAC; it provides early warnings and forecasts final cost.

## Answer

**Earned value analysis (EVA)** is a project monitoring and control technique that measures project performance by comparing the value of work planned, the value of work actually done, and the actual money spent, all at the same date. It shows schedule and cost status in one system.

#### Basic terms

| Term | Meaning |
|---|---|
| PV (BCWS) | Planned value: budgeted cost of work scheduled up to the date |
| EV (BCWP) | Earned value: budgeted cost of work actually completed |
| AC (ACWP) | Actual cost spent for the work completed |
| SV = EV - PV | Schedule variance (positive = ahead) |
| CV = EV - AC | Cost variance (positive = under budget) |
| SPI = EV/PV | Schedule performance index (>1 ahead) |
| CPI = EV/AC | Cost performance index (>1 under budget) |
| EAC = BAC/CPI | Estimate at completion |

#### Graphical view

```text
 Cost
  |            BAC
  |        AC  .--
  |   PV  .-'-'
  |   .-'   EV
  | .'
  +------------ time
```

#### Uses

- Finds schedule and cost variance at any reporting date.
- Forecasts final cost (EAC) and the estimate to complete (ETC = EAC - AC).
- Gives early warning, so corrective action is taken early.
- Works for any project: construction, hydropower, road.

#### Interpretation

| Result | Meaning |
|---|---|
| SPI > 1, CPI > 1 | Ahead of schedule, under budget |
| SPI < 1, CPI < 1 | Behind schedule, over budget |
| SPI = 1, CPI = 1 | As planned |

## Check yourself

The answer's key points as multiple-choice questions, with the correct option and why.

1. Earned value analysis measures performance by comparing which three quantities at the same date?
   A. Planned work value, value of work done, and actual money spent
   B. Profit, loss and revenue
   C. Labour, material and equipment
   D. Time, quality and safety
   Answer: A. EVA compares PV, EV and AC at one date to show schedule and cost status together. (Key point: Definition of EVA)

2. Which pair of formulas is correct?
   A. SV = EV - AC, CV = EV - PV
   B. SV = PV - EV, CV = AC - EV
   C. SV = EV - PV, CV = EV - AC
   D. SV = AC - PV, CV = PV - EV
   Answer: C. Schedule variance is EV - PV and cost variance is EV - AC; positive values are favourable. (Key point: Variance formulas)

3. SPI < 1 and CPI < 1 means what?
   A. Ahead of schedule, under budget
   B. Behind schedule, over budget
   C. Behind schedule, under budget
   D. As planned
   Answer: B. SPI below 1 means behind schedule and CPI below 1 means over budget. (Key point: Interpreting indices)

4. How is the estimate to complete (ETC) found?
   A. ETC = BAC + AC
   B. ETC = EAC - AC
   C. ETC = EV - PV
   D. ETC = BAC x CPI
   Answer: B. EAC = BAC/CPI is the forecast final cost; ETC = EAC - AC is the remaining cost. (Key point: Forecasting)

## Related in Project Engineering

- [Cost control need; earned value; EVA approach](https://www.bctengineer.com/question.md?key=semester_7%2Fproject_engineering%3Acost-control-necessary-eva-approach) — Project Engineering, chapter 4

## Related in other subjects

- [Earned value analysis for performance control](https://www.bctengineer.com/question.md?key=semester_8%2Fconstruction_management%3Aeva-performance-control) — Construction Management, chapter 7, asked 6×
- [Earned value management](https://www.bctengineer.com/question.md?key=semester_7%2Fict_project_management%3Aevm) — ICT Project Management, chapter 9
- [Calorific value and air from ultimate analysis](https://www.bctengineer.com/question.md?key=semester_6%2Fenergy_resources%3Adulong-calorific-value-fuel-oil) — Energy Resources, chapter 1