Enter the total project budget and the percentage of the project that is complete into the calculator to determine the earned value.
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Earned Value Formula
The following formula is used to calculate the earned value of a project.
EV = B * C%
- Where EV is the earned value ($)
- B is the total project budget ($)
- C% is the percentage of the project that has been complete (%)
Earned Value Definition
An earned value is defined as the portion of monetary value that a company or business has earned through working on a project that is not yet complete. In other words, the percentage of money earned relative to the same percentage of work that has already been performed.
How to calculate earned value?
Example Problem #1:
For this first example, we will look at a website design company that was hired to create a website for a candy store.
First, the total project budget needs to be determined. In this case, the design firm quoted a total budget of $45,000.00.
Next, determine the percentage of the project that has been completed to date. After analyzing the deliverables, it’s determined that 35% of the website has been designed.
Finally, using the formula the earned value can be calculated as:
EV = B*C%
= $45,000 * .35
Example Problem #2
In this next example, the same candy store as from example 1 is building an extension for more space.
The total project budget quoted by the contractor is $37,000.00.
After one month, 74% of the extension is deemed to be complete.
Using the formula, the earned value is calculated as:
= $37,000 *.74