PMP® Formula Pocket Guide
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Earned Value Mathematical Basics
CV = EV - AC Average (Mean) = Sum of all members divided by the number of items.
CPI = EV / AC Median = Arrange values from lowest value to highest. Pick the middle
SV = EV - PV one. If there is an even number of values, calculate the mean of the
SPI = EV / PV two middle values.
EAC ‘no variances’ = BAC / CPI Mode = Find the value in a data set that occurs most often.
EAC ‘fundamentally flawed’ = AC + ETC
EAC ‘atypical’ = AC + BAC - EV Values
EAC ‘typical’ = AC + ((BAC - EV) / CPI) 1 sigma = 68.26%
ETC = EAC - AC 2 sigma = 95.46%
ETC ‘atypical’ = BAC - EV
ETC ‘typical’ = (BAC - EV) / CPI 3 sigma = 99.73%
ETC ‘flawed’ = new estimate 6 sigma = 99.99%
Percent Complete = EV / BAC * 100 Control Limits = 3 sigma from mean
VAC = BAC - EAC Control Specifications = Defined by customer; looser than
EV = % complete * BAC the control limits
PERT Order of Magnitude estimate = -25% to +75%
PERT 3-point = (Pessimistic+(4*Most Likely)+Optimistic)/6 Preliminary estimate = -15% to + 50%
PERT = (Pessimistic - Optimistic) / 6 Budget estimate = -10% to +25%
PERT Activity Variance = ((Pessimistic - Optimistic) / 6)^2 Definitive estimate = -5% to +10%
PERT Variance all activities = sum((Pessimistic - Optimistic) / 6)^2 Final estimate = 0%
Float on the critical path = 0 days
Network Diagram
Activity Duration = EF - ES + 1 or Activity Duration = LF - LS + 1 Pareto Diagram = 80/20
Total Float = LS - ES or Total Float = LF – EF Time a PM spends communicating = 90%
Free Float = ES of Following - ES of Present - DUR of Present Crashing a project = Crash least expensive tasks on critical
EF = ES + duration - 1 path.
ES = EF of predecessor + 1 JIT inventory = 0% (or very close to 0%.)
LF = LS of successor - 1
LS = LF - duration + 1
Minus 100 = (100) or -100
Acronyms
Project Selection AC Actual Cost
PV = FV / (1+r)^n BAC Budget at Completion
FV = PV * (1+r)^n BCR Benefit Cost Ratio
NPV = Formula not required. Select biggest number. CBR Cost Benefit Ratio
ROI = Formula not required. Select biggest number.
IRR = Formula not required. Select biggest number. CPI Cost Performance Index
Payback Period = Add up the projected cash inflow minus expenses CV Cost Variance
until you reach the initial investment. DUR Duration
BCR = Benefit / Cost EAC Estimate at Completion
CBR = Cost / Benefit EF Early Finish
Opportunity Cost = The value of the project not chosen.
EMV Expected Monetary Value
Communications ES Early Start
Communication Channels = n * (n-1) / 2 ETC Estimate to Complete
EV Earned Value
Probability FV Future Value
EMV = Probability * Impact in currency IRR Internal Rate of Return
Procurement LF Late Finish
PTA = ((Ceiling Price - Target Price) / Buyer's Share Ratio) + Target LS Late Start
Cost NPV Net Present Value
PERT Program Evaluation and Review Technique
Depreciation PTA Point of Total Assumption
Straight-line Depreciation:
Depr. Expense = Asset Cost / Useful Life
PV Planned Value
Depr. Rate = 100% / Useful Life PV Present Value
Double Declining Balance Method: ROI Return on Investment
Depr. Rate = 2 * (100% / Useful Life) SPI Schedule Performance Index
Depr. Expense = Depreciation Rate * Book Value at Beginning of Year SV Schedule Variance
Book Value = Book Value at beginning of year - Depreciation Expense
VAC Variance at Completion
Sum-of-Years' Digits Method:
Sum of digits = Useful Life + (Useful Life - 1) + (Useful Life - 2) + etc. Sigma / Standard Deviation
Depr. rate = fraction of years left and sum of the digits (i.e. 4/15th) ^ “To the power of” (2^3 = 2*2*2 = 8)
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