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Earned Value AnalysisEarned Value Analysis

Earned value analysis is a method of performance measurement; it can also determine if projects offer value for money and assess whether a project is successful and efficient by evaluating how the money has been spent and how much work has been done up to that point.

Earned Value Analysis is a useful tool for measuring performance based on what the project has accomplished so far; it helps managers recognise the risk areas and make the right changes before the project gets to a point where it has failed and there is no way back.

How is an Earned Value Calculation made?

Here is an Earned Value example based on our spreadsheet formula:

For a project, the Project Labour Costs are £100 and the Project Resource Costs are £150, which means the Budgeted Cost of Work Scheduled is £250. The Percentage of Work Completed is 10%, and by dividing the Budgeted Cost of Work Scheduled by 10%, that means the Earned Value is 25. Then, by dividing the Actual Cost of Work Scheduled by the Earned Value, you will find that the Cost Performance Index is 200. 

You can use this easy calculation formula for your own projects - it is free to use and available to download here.

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