Earned Value (EV / BCWP)
Earned Value, written as EV and formerly called BCWP (Budgeted Cost of Work Performed), tells you the budgeted worth of the work you have ACTUALLY finished so far. The key idea is that you "earn" value by completing work, and each piece of completed work is valued at what you originally budgeted for it — not at what it actually cost you. The old name BCWP says it plainly: the Budgeted Cost of the Work you have Performed.
To calculate it, you take your actual percent complete — a realistic estimate of how much of the project is genuinely done — and multiply it by the BAC, the total approved budget. The result is a dollar amount representing the value of everything you've truly accomplished.
A higher EV means you've completed more real work; a lower EV means less is done. Earned Value is the star of project tracking because it converts "progress" into money, letting you compare it fairly against both Planned Value (are we ahead of or behind schedule?) and Actual Cost (are we spending more or less than the work is worth?). Project managers rely on EV as the honest measure of accomplishment, since it counts finished work rather than time passed or money spent.
Think of it like a student's homework worth 100 points total. If they've correctly completed problems worth 30 points, they've 'earned' 30 points — regardless of how many hours they spent or how far into the semester it is. Earned Value counts what's actually done and banked, not effort or time.
Take the same project with a total budget (BAC) of $200,000. At the end of month 4, you assess the work and find you are genuinely 30% complete. Earned Value = 30% × $200,000 = 0.30 × $200,000 = $60,000. This means you have delivered $60,000 worth of work. If your Planned Value said you should have $80,000 done by now, your $60,000 of Earned Value shows you're behind schedule — you've accomplished less than the plan expected.
Every PMP formula explained free — plus worked examples and practice in PMP Math, and full timed mocks in the simulator.