# How are financial values calculated?

**Document ID :**KB000103658

**Last Modified Date :**18/09/2018

Introduction:

Need clarifications on how financial fields are calculated and what their definition is

Question:

How are financial values calculated? ACWP, BAC, BAC Cost, BCWS, BCWP, CPI, SPI

Answer:

Lets use an example to try to clarify these figures.

1. Create a project that spans from 01/01/18 to 31/07/2018

2. Add a team member and assign him to a task with the same dates as above

3. Note that ETC and allocation figures are set to 1216 hours

4. This gets calculated as resource working days x calendar availability: 152 working days x 8 working hours per days

5. Financially enable the project, associate a rate matrix to the project and add a financial department and location

6. On the rate matrix we have added a catch all row (to be used for any configuration) with a 140 USD row

7. Run the Rate Matrix Extraction job ( It is crucial to run this job prior to the Post Timesheets job, otherwise ACWP values will not be calculated)

8. Submit a timesheet

9. Run the Post Timesheet job.

10. Run the Update Earnev value and Cost Totals job

11. ACWP is now calculated: 5600 USD > 40 timesheet hours x 140 USD per hour

12. Let create a baseline

13. Next values are now calculated:

BAC is 1216 (Total effort: ETC + Actuals)

BAC Cost is 170240 USD > 1216 (Total effort hours) x 140 (rate specified at rate matrix)

14. Run the Update Earned Value and Cost Totals job

15. Following values have now been calculated:

BCWS 141397.96 USD > BAC Cost up to today (28/06/18) or based on As of date

This is the portion of the total BAC Cost of 170240 USD till 28/06/18

BCWP is calculated at task level and at project level:

a. At task level:

BAC x % Complete. We set the % complete at 25% > 170240 USD x 25% > 42560 USD

b. At project level:

Sum of [BCWP] for all Level 1 Tasks. On this case with only one task, the same value as above: 42560 USD

16. Run the Update earned Value and Cost Totals job

17. Following values are now calculated:

CPI: BCWP / ACWP > 42560 USD / 5600 USD > 7.6

SPI: BCWP / BCWS > 42560 USD / 141397.96 USD > 0.30

1. Create a project that spans from 01/01/18 to 31/07/2018

2. Add a team member and assign him to a task with the same dates as above

3. Note that ETC and allocation figures are set to 1216 hours

4. This gets calculated as resource working days x calendar availability: 152 working days x 8 working hours per days

5. Financially enable the project, associate a rate matrix to the project and add a financial department and location

6. On the rate matrix we have added a catch all row (to be used for any configuration) with a 140 USD row

7. Run the Rate Matrix Extraction job ( It is crucial to run this job prior to the Post Timesheets job, otherwise ACWP values will not be calculated)

8. Submit a timesheet

9. Run the Post Timesheet job.

10. Run the Update Earnev value and Cost Totals job

11. ACWP is now calculated: 5600 USD > 40 timesheet hours x 140 USD per hour

12. Let create a baseline

13. Next values are now calculated:

BAC is 1216 (Total effort: ETC + Actuals)

BAC Cost is 170240 USD > 1216 (Total effort hours) x 140 (rate specified at rate matrix)

14. Run the Update Earned Value and Cost Totals job

15. Following values have now been calculated:

BCWS 141397.96 USD > BAC Cost up to today (28/06/18) or based on As of date

This is the portion of the total BAC Cost of 170240 USD till 28/06/18

BCWP is calculated at task level and at project level:

a. At task level:

BAC x % Complete. We set the % complete at 25% > 170240 USD x 25% > 42560 USD

b. At project level:

Sum of [BCWP] for all Level 1 Tasks. On this case with only one task, the same value as above: 42560 USD

16. Run the Update earned Value and Cost Totals job

17. Following values are now calculated:

CPI: BCWP / ACWP > 42560 USD / 5600 USD > 7.6

SPI: BCWP / BCWS > 42560 USD / 141397.96 USD > 0.30

Additional Information:

Definitions of the fields are as below:

Earned Value Calculations

BAC: (Sum of

Baseline required: Yes

BCWS: Sum of the BAC through a point in time. That point in time is the Project As Of Date, if set, else the current system date.

Baseline required: Yes

BCWP: Depends on the Earned Value Calculation Method

Baseline Required: Yes

Earned Value Calculation Method -

Project Level: BCWP = Sum of [BCWP] for all Level 1 Tasks

If % Complete = 100, BCWP = BAC

If % Complete = 0, then BCWP = 0

ACWP: Sum of the actuals on the project through a point in time. That point in time is the Project As Of Date, if set, else the current system date. If you have

Baseline Required:

Detail Task Level: ACWP = Sum of all assignment Actual Cost values for the task

Summary Task: ACWP = Sum of ACWP for Child Tasks

Project Level: ACWP = Sum of ACWP for all Level 1 Summary Tasks

EAC: Aggregated Total for the cost of all actuals over time

EAC = ACWP + [(BAC – BCWP) / CPI] where CPI = BCWP / ACWP

Baseline Required: Yes

EAC (T) = ACWP + ETC (Cost)

Baseline Required:

EAC (AT) = ACWP + (BAC – BCWP)

Baseline Required: Yes

ETC (Cost) = remaining labor cost (ETC * billing rate) + remaining non-labor cost

Baseline Required:

ETC (AT) = BAC – BCWP

Baseline Required: Yes

ETC (T) = (BAC – BCWP) / CPI where CPI = BCWP / ACWP

Baseline Required: Yes

CV is the amount of what has been accomplished versus what has been spent

CV = BCWP – ACWP

Baseline Required: Yes

SV is the amount of work performed versus what is scheduled to date

SV = BCWP - BCWS

Baseline Required: Yes

CPI is the ratio of work performed to money spent

CPI = BCWP / ACWP

CPI >= 1 -> favorable – at or under budget

CPI < 1 -> unfavorable – over budget

Baseline Required: Yes

SPI is the ratio or work performed to work scheduled

SPI =BCWP / BCWS

SPI >= 1 -> favorable – ahead of schedule

SPI < 1 -> unfavorable – behind schedule

Baseline Required: Yes

Earned Value Calculations

**BAC**: Baseline at CompletionBAC: (Sum of

**the assignment level Actual Cost values for the project) + ETC (Cost) at the time the baseline is recorded. This will include***all***posted actual costs.***future*Baseline required: Yes

**BCWS**: Budgeted Cost of Work ScheduledBCWS: Sum of the BAC through a point in time. That point in time is the Project As Of Date, if set, else the current system date.

Baseline required: Yes

**BCWP**: Budgeted Cost of Work Performed (a.k.a EV)BCWP: Depends on the Earned Value Calculation Method

Baseline Required: Yes

Earned Value Calculation Method -

**Percent Complete**:

Project Level: BCWP = Sum of [BCWP] for all Level 1 Tasks

**0/100**:

**50/50**:

If % Complete = 100, BCWP = BAC

If % Complete = 0, then BCWP = 0

**Level of Effort (LOE)**

**Weighted Milestones**- use BCWP Override field – not calculated by Clarity**Milestone Percent Complete (PC)**- use BCWP Override field – not calculated by Clarity**Apportioned Effort (AE)**- use BCWP Override field – not calculated by Clarity

**ACWP**: Actual Cost of Work PerformedACWP: Sum of the actuals on the project through a point in time. That point in time is the Project As Of Date, if set, else the current system date. If you have

**posted actuals, they will not be included in this calculation unless your As Of date is at or beyond the last date of posted actuals.***future*Baseline Required:

**No**Detail Task Level: ACWP = Sum of all assignment Actual Cost values for the task

Summary Task: ACWP = Sum of ACWP for Child Tasks

Project Level: ACWP = Sum of ACWP for all Level 1 Summary Tasks

**EAC**: Estimate at CompletionEAC: Aggregated Total for the cost of all actuals over time

EAC = ACWP + [(BAC – BCWP) / CPI] where CPI = BCWP / ACWP

Baseline Required: Yes

**EAC (T)**: Estimate at Completion (Cost of Total Effort)EAC (T) = ACWP + ETC (Cost)

Baseline Required:

**No****EAC (AT)**: Estimate at Completion (Atypical)EAC (AT) = ACWP + (BAC – BCWP)

Baseline Required: Yes

**ETC (Cost)**: Cost of Estimate to CompleteETC (Cost) = remaining labor cost (ETC * billing rate) + remaining non-labor cost

Baseline Required:

**No****ETC (AT)**: Atypical cost of Estimate to CompleteETC (AT) = BAC – BCWP

Baseline Required: Yes

**ETC (T)**: Typical cost of Estimate to CompleteETC (T) = (BAC – BCWP) / CPI where CPI = BCWP / ACWP

Baseline Required: Yes

**CV**: Cost VarianceCV is the amount of what has been accomplished versus what has been spent

CV = BCWP – ACWP

Baseline Required: Yes

**SV**: Schedule VarianceSV is the amount of work performed versus what is scheduled to date

SV = BCWP - BCWS

Baseline Required: Yes

**CPI**: Cost Performance IndexCPI is the ratio of work performed to money spent

CPI = BCWP / ACWP

CPI >= 1 -> favorable – at or under budget

CPI < 1 -> unfavorable – over budget

Baseline Required: Yes

**SPI**: Schedule Performance IndexSPI is the ratio or work performed to work scheduled

SPI =BCWP / BCWS

SPI >= 1 -> favorable – ahead of schedule

SPI < 1 -> unfavorable – behind schedule

Baseline Required: Yes