Understanding CPI, EAC, ETC, and VAC
The four earned value numbers in the Budget view, what each one is calculated from, and which thresholds are worth acting on.
Earned value comes first
Earned value is percentage complete multiplied by planned cost. A task with a planned cost of $100,000 that is 40% done has earned $40,000 of value, regardless of what has actually been spent on it.
Everything below is derived from that number, your actual cost, and your planned cost. You do not have to enter anything extra: if you keep planned cost, actual cost, and percentage complete honest, the rest is arithmetic.
CPI: are you getting value for money
The Cost Performance Index is earned value divided by actual cost.
A CPI of 1.0 means you are getting a dollar of value for every dollar spent. Above 1.0 is under budget. Below 1.0 means each dollar is buying less than planned, and the shortfall compounds across the rest of the work.
The convention worth adopting is green at 1.0 and above, amber between 0.8 and 1.0, and red below 0.8, reviewing anything amber weekly. Where actual cost is still zero, CPI is reported as 1.0 rather than dividing by zero.
EAC and ETC: what it will cost from here
Estimate at Completion projects the final cost if current efficiency continues: actual cost plus the remaining value to be earned, divided by CPI. Dividing by CPI is what makes it a projection rather than wishful thinking -- if you have been getting 80 cents of value per dollar, the remaining work is assumed to cost the same way.
Estimate to Complete is simply EAC minus what you have already spent: the money still to go.
VAC: the number your finance director asks for
Variance at Completion is the planned budget minus EAC. A negative VAC means the project is currently forecast to finish over budget, by that amount.
This is usually the single most useful number on the page, because it converts a performance index into currency. "CPI is 0.87" prompts a discussion; "we are forecast $140,000 over" prompts a decision.
Calculate continuously, not quarterly
The trap is treating these as a quarterly reporting ritual. By the time a quarterly CPI reads 0.85 the money is already gone.
Because Depentra computes them per task and rolls them up by group, a single workstream drifting from 1.0 to 0.9 over three weeks is visible long before it moves the programme number.
The method behind this
Earned value management explained, with the numbers worked through →
What earned value is, how CPI, SPI, EAC, ETC, and VAC are calculated, and a worked example of a project heading $125,000 over budget.