PMP Math Formulas

Page 1 of 2

Acronym Meaning Description FormulaAC Actual Cost The Actual amount of money the project has spent to date.

BAC Budget At Completion

CC Communication ChannelsN (N - 1) / 2 (Where N = Number of people in your team)

CPI Cost Performance Index

CPI = EV / AC

CV Cost Variance

CV = EV - AC

EAC Estimate At CompletionEAC = BAC / CPI

ETC Estimate To Complete

ETC = EAC - AC

EV Earned Value

EV = BAC * % Comp

EVA Economic Value Add

FV Future ValueFV = PV (1 + i)n (PV - Present Value ; i - Interest Rate ; n - Number of time periods)

P E R T PERT Estimate(P + 4M + O) / 6 (i.e. P - Pessimistic ; M - Most Likely or Realistic ; O - Optimistic)

PTA Point of Total Assumption

PV Present ValuePV = FV / (1 + i)n (FV - Future Value ; i - Interest Rate ; n - Number of time periods)

ROIC Return on Invested Capital

ROIC = Net Income After Tax / Total Capital Invested

SPI Schedule Performance Index

SPI = EV / PV

STD Deviation Standard Deviation Standard Deviation of PERT Estimate. (P - O) / 6 (i.e. P - Pessimistic ; O - Optimistic)

SV Schedule Variance

SV = EV - PV

TCPI To Complete Performance Index(BAC - EV) / (EAC - AC)

VAC Variance At Completion VAC = BAC – EAC

VAR VarianceVAR = BAC - AC

The sum of all the budget values established for the work to be performed on a project or a work breakdown structure component or a schedule activity. The total planned value for the project.

Refers to the medium used to convey information from a sender (or transmitter) to a receiver.

Measures the project based on its financial performance. Measurement of spending efficiency.< 1 means cost overrun> 1 means under budget= 1 means performance matches plan

The difference between the earned value amount and the cumulative actual costs of the project. Measurement of cost performance.(-) indicates over budget(+) indicates under budgetCV of zero indicates right on budget

These forecasting formulas predict the likely completed costs of the project based on current scenarios within the project.

The earned value management formula that predicts how much funding the project will require to be completed. There are three variations of this formula, all based on conditions the project maybe experiencing.

It is the physical work completed to date and the authorized budget for that work. It is the percentage of the budget at completion (BAC) that represents the actual work completed in the project.

EVA is a financial performance method to calculate the true economic profit of a corporation.

EVA = Net Operating Profit After Tax - Cost of CapitalEVA = (Revenue - Operating Expenses - Taxes) - (Investment Capital x % Cost of Capital)

A benefit comparison model that determines a future value of money.

Program Evaluation and Review Technique(Three-Point Estimate).

The cost point beyond which the seller incurs all incremental costs, assuming 100% of the risk of cost increases.

PTA = Target Cost + ((Ceiling Price - Target Price) / Buyer's Share)Price = Cost + Profit

A benefit comparison model that determines a present value of a future amount of money.

Is a financial measure that quantifies how well a company generates cash flow relative to the capital it has invested in its business. When the return on capital is greater than the cost of capital (usually measured as the weighted average cost of capital), the company is creating value; when it is less than the cost of capital, value is destroyed.

A measurement of the project based on its schedule performance. Measurement of work efficiency.< 1 means behind plan> 1 means ahead plan= 1 means performance matches plan

The difference between the Earned Value (EV) and the Planned Value (PV). Indicates schedule performance.(-) indicates behind(+) indicates aheadSV or zero indicates right on schedule

To Complete Performance Index< 1 is good - you can under-perform> 1 is bad - you must perform better

A forecasting formula that predicts how much of a variance the project will likely have based on current conditions within the project.

A Variance is the difference between what was expected and what was experienced.

Math Formula Memory Technique

Page 2 of 2

Math Formula Memory Technique1 2 3 4 5 6 7 8 EAC at Budgeted Rate = BAC + AC - EVE V BAC * Actual % Complete EAC at Present CPI = BAC / CPIP V BAC * Planned % Complete EAC using SPI & CPI = [(BAC - EV) / SPI X CPI] + ACF V PV FV = PV(1 + i)n Where i - Interest, n - # of time periodsC V EV AC PV = BAC * Planned % CompleteS V EV PVC PI EV ACS PI EV PV Normal DistributionE AC AC *% CompE AC BAC / CPIE TC AC EACV AC BAC EACV AR BAC ACT CPI BAC EV / (BAC - AC)

EPF CSCS EEE VVT

Critical Path

1 SD = 1 Sigma1 Sigma = 68.26%2 Sigma = 95.46%3 Sigma = 99.73%6 Sigma = 99.99%

Standard Deviation (SD) = (P - O) / 6(i.e. P - Pessimistic ; O - Optimistic)

EV = BAC * Actual Deliverables % CompletePV = BAC * Planned Schedule % Complete FV = PV(1 + i)nCV = EV - AC (> 0 Good)SV = EV - PV (> 0 Good)CPI = EV / AC (> 1 Good)SPI = EV / PV (> 1 Good)EAC = AC / % CompleteEAC = BAC / CPIETC = EAC - ACVAC = BAC - EACVAR = BAC - ACTCPI = (BAC - EV) / (BAC - AC) (< 1 - Good; > 1 - Bad)

Note:Deliverables - Example: RoomsSchedule - Example: Days, Weeks

PERT = (P + 4M + O) / 6 (Weighted)(P - Pessimistic (High));(M - Most Likely or Realistic (Middle)) ;(O - Optimistic (Low))

Three Point Estimate = (P + M + O) / 3 (Non-Weighted)Where P = Pessimistic ; M =Most Likely ; O = Optimistic

Communication Channels (CC) = N (N - 1) / 2(Where N = Number of people in your team)ROIC = Net Income After Tax / Total Capital InvestedROIC - Return On Invested CapitalBenefit Measurement - Bigger is better

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

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

Note:To memorize the formulas, follow the number pattern for filling the blanks.

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