17 PMP Formulas mentioned in the PMBOK Guide

BAC
Budgeted at
completion

PV c
Planned Value (
Costs )
PV = Planned %
complete x BAC (
Project budget )


EV
Earned Value
EV = Actual % complete
x BAC ( Project budget )
------
EV = Total months
completed / Total
months project x Total
cost
--------------
Actual % complete =
EV / BAC


AC
Actual Cost

CV
Cost Variance
CV = EV AC
EV = Earned Value
AC = Actual Cost
< 0 Over budget
= 0 On budget
> 0 Budget budget
SV SV = EV PV
< 0 Behind schedule
= 0 On schedule
Schedule Variance EV = Earned Value
PV = Planned Value
> 0 Ahead of schedule

SPI
Schedule
Performance Index
SPI = EV/PV
EV = Earned Value
PV = Planned Value
< 1 behind schedule
= 1 on schedule
> 1 ahead of schedule
CPI
Cost Performance
Index
CPI = EV/AC
EV = Earned Value
AC = Actual Cost
< 1 Over budget
= 1 On budget
> 1 Under budget

sometimes the term cumulative CPI would be
shown, which actually is the CPI up to that
moment
CPI
c

Cost Performance
Index
CPIc = EV
c
/AC
c

EV = Earned Value
AC = Actual Cost
< 1 Over budget
= 1 On budget
> 1 Under budget

sometimes the term cumulative CPI would be
shown, which actually is the CPI up to that
moment
TCPI
To-Complete
Performance Index
TCPI = (BAC EV)/
(BAC AC)
Or
TCPI = Remaining Work
Remaining Funds
BAC = Budget at
completion
EV = Earned value
AC = Actual Cost
TCPI = Remaining Work
< 1 Under budget
= 1 On budget
> 1 Over budget
/Remaining Funds
BAC = Budget at
completion
EV = Earned value
CPI = Cost performance
index
TCPI
c

To-Complete
Performance Index
TCPI
c
= (BAC EV)/
(BAC AC) ?????
BAC = Budget at
completion
EV = Earned value
CPI = Cost performance
index
< 1 Under budget
= 1 On budget
> 1 Over budget
TCPI
s

To-Complete
Performance Index
TCPI
s
= (BAC EV)/
(BAC AC) ?????
BAC = Budget at
completion
EV = Earned value
CPI = Cost performance
index
< 1 Under budget
= 1 On budget
> 1 Over budget
EAC no variance
Estimate at
Completion
if CPI remains the
same

EAC = BAC/CPI
BAC = Budget at
completion
CPI = Cost performance
index
if the CPI would remain the same till end of
project, i.e. the original estimation is not accurate
EAC typical
Estimate at
Completion
if substandard
EAC = AC + (BAC -
EV)/(CPI*SPI)
AC = Actual Cost
BAC = Budget at
completion
use when the question gives all the values (AC,
BAC, EV, CPI and SPI), otherwise, this formula is
not likely to be used
performance
continues
EV = Earned Value
CPI = Cost Performance
Index
SPI = Schedule
Performance Index
EAC atypical
Estimate at
Completion
if BAC remains the
same
EAC = AC + BAC EV
AC = Actual Cost
BAC = Budget at
completion
EV = Earned Value
the variance is caused by a one-time event and is
not likely to happen again
EAC flawed
Estimate at
Completion
if original is flawed
( fr: est dfectueux
)
EAC = AC + New ETC
AC = Actual Cost
New ETC = New
Estimate to Completion
if the original estimate is based on wrong
data/assumptions or circumstances have changed
ETC
Estimate to
Completion
ETC = EAC -AC
EAC = Estimate at
Completion
AC = Actual Cost

ETC flawed
Estimate to
Completion
reestimate
VAC
Variance at
Completion

VAC = BAC EAC
BAC = Budget at
completion
EAC = Estimate at
Completion
< 0 Under budget
= 0 On budget
> 0 Over budget







(Valid) ETC = EAC-AC
(atypical) ETC = BAC-EV
(typical) ETC = (BAC-EV) / CPI













Formulas / Math for PMP


If you think a formula is missing here but required in PMP exam. Post a comment and we will
add to this table.
1. PERT (P + 4M + O )/ 6 Pessimistic, Most Likely,
Optimistic
2. Standard Deviation (P - O) / 6
3. Variance [(P - O)/6 ]squared
4. Float or Slack LS-ES and LF-EF
5. Cost Variance EV - AC
6. Schedule Variance EV - PV
7. Cost Perf. Index EV / AC
8. Sched. Perf. Index EV / PV
9. Est. At Completion (EAC) BAC / CPI,
AC + ETC -- Initial Estimates are flawed
AC + BAC - EV -- Future variance are Atypical
AC + (BAC - EV) / CPI -- Future Variance would
be typical
10. Est. To Complete
Percentage complete
EAC - AC
EV/ BAC
11. Var. At Completion BAC - EAC
12. To Complete Performance
Index TCPI
Values for the TCPI index of less then 1.0 is good
because it indicates the efficiency to complete is
less than planned. How efficient must the project
team be to complete the remaining work with the
remaining money?
( BAC - EV ) / ( BAC - AC )
13. Net Present Value Bigger is better (NPV)
14. Present Value PV FV / (1 + r)^n
15. Internal Rate of Return Bigger is better (IRR)
16. Benefit Cost Ratio Bigger is better ((BCR or Benefit / Cost) revenue
or payback VS. cost)
Or PV or Revenue / PV of Cost
17. Payback Period Less is better
Net Investment / Avg. Annual cash flow.
18. BCWS PV
19. BCWP EV
20. ACWP AC
21. Order of Magnitude Estimate -25% - +75% (-50 to +100% PMBOK)
22. Budget Estimate -10% - +25%
23. Definitive Estimate -5% - +10%
24. Comm. Channels N(N -1)/2
25. Expected Monetary Value Probability * Impact
26. Point of Total Assumption
(PTA)
((Ceiling Price - Target Price)/buyer's Share Ratio)
+ Target Cost
Sigma
1 = 68.27%
2 = 95.45%
3 = 99.73%
6 = 99.99985%
Return on Sales ( ROS )

Net Income Before Taxes (NEBT) / Total Sales OR
Net Income After Taxes ( NEAT ) / Total Sales
Return on Assets( ROA )

NEBT / Total Assets OR
NEAT / Total Assets
Return on Investment ( ROI ) NEBT / Total Investment OR
NEAT / Total Investment
Working Capital
Current Assets - Current Liabilities
Discounted Cash Flow
Cash Flow X Discount Factor
Contract related formulas
Savings = Target Cost Actual Cost

Bonus = Savings x Percentage

Contract Cost = Bonus + Fees

Total Cost = Actual Cost + Contract Cost
Critical Path formulas
Forward Pass: (Add 1 day to Early Start) EF = (ES + Duration - 1)
Backward Pass: (Minus 1 day to Late Finish)
LS = (LF - Duration + 1)
ES = Early Start; EF = Early Finish;
LS = Late Start; LF = Late Finish

EVA = Net Operating Profit After Tax - Cost of Capital (Revenue - Op. Exp - Taxes) -
(Investment Capital X % Cost of Capital) EVA - Economic Value Add Benefit Measurement -
Bigger is better

Source Selection = (Weightage X Price) + (Weightage X Quality)








EVM Formulas, How to Understand?
The following are EVM formulas. For EVM formulas description, read the article Definition of
EVM formulas.
SV = EV PV + ve good


CV = EV AC + ve good
SPI = EV/PV greater than 1 is good
CPI = EV/AC greater than 1 is good
EAC = AC + BAC EV budgeted, atypical, no variation in future
EAC = BAC/CCPI no variation in BAC, same rate spending
EAC = AC + (BAC-EV)/CCPI typical, same variation in future
TCPI = (BAC EV)/(BAC-AC) must meet BAC
TCP I = (BAC EV)/(EAC-AC) not meet BAC, CPI decreased
VAC = BAC - EAC
ETC = EAC AC

% Complete = EV/BAC
EV = Total months completed / Total months project x Total cost
PV = Planned % complete x Project budget
EV = Actual % complete x Project budget
- See more at: http://innovativeprojectguide.com/pmp-exam/6-PMP%20EXAM/3-what-is-evm-whatis-
earned-value-management-and-evm-formulas.html#sthash.nzxXKGx1.dpuf




No. of Communication
Channels
n (n-1)/2
n = number of
members in the team
n should include the project manager

e.g. if the no. of team members increase from 4 to
5, the increase in communication channels:
5(5-1)/2 4(4-1)/2 = 4
PERT Estimation (O + 4M + P)/6

O= Optimistic
estimate
M= Most Likely
estimate
P= Pessimistic
estimate
Standard Deviation
(P O)/6
O= Optimistic
estimate
P= Pessimistic
estimate
this is a rough estimate for the standard
deviation
Float/Slack
LS ES
LS = Late start
ES = Early start
LF EF
LF = Late finish
EF = Early finish
= 0 On critical path
< 0 Behind schedule

Project Selection >
Future Value
Present Value
NPV Net Present Value
ROI Rate of Interest
IRR Internal Rate of Return
Payback Period
BCR Benefit Cost Ratio
CBR Cost Benefit Ratio

Communications > Communication Channels

Procurement > PTA Point of Total Assumption

Risk > EMV Expected Monetary Value

Cost & Schedule > EVM Earned Value
Management
CV Cost Variance
SV Schedule Variance
AC Actual Cost
PV Present Value
CPI Cost Performance Index
SPI Schedule Performance Index
EAC Estimate at Completion
BAC Budget at Completion
TCPI To Complete Performance Index

PERT(Program Evaluation and Review Technique)
>
EAD Expected Activity Duration
Standard Deviation
Variance of an activity

Network Diagram > Activity Duration
Total Float
Free Float

Miscellaneous > Average(Mean)
Median
Mode
Sigma Values
Rough Order of Magnitude(ROM)
estimate
Preliminary estimate
Budget estimate
Definitive estimate
Final estimate