Description | Formula | Comments |
NPV | Present value of benefit - present value of cost | Method for financial evaluation for long term projects. +ve NPV is good, -ve NPV is bad The project with higher NPV is better project. |
# of channel of communication | N(N-1)/2 | where N is the number of project members |
PERT | | (Program Evaluation & Review Technique) |
EAD (Expected Activity Duration) | [P + O + 4M]/6 | O= Optimistic, M = Most Likely, P = Pessimistic You use the PERT calculation (P + 4M + O)/6 to compute a weighted average of the totals. This number represents the mean (or 50 percent point) |
SD (Activity Standard Deviation) | [P-O]/6 | |
Activity Variance | [(P-O)/6]^{2} | Standard Deviation Squared |
Standard Deviation Squared | EAD +/- SD | Start of Range = EAD - SD, End of Range = EAD + SD |
Range for an overall project | Project EAD +/- Project SD | Project EAD = Sum of all individual activity EAD on critical path Project SD = âˆšSum of all individual activity variances (âˆš=Square root) |
Float Activity on critical path has 0 or no float | Late Start - Early Start Late Finish - Early Finish | Both formula returns the same result If network diagram has only two paths then the difference between the two paths is the float |
EV (Earned Value) | Estimated value of work actually accomplished | Cost to date as per the original baseline (if there are variance don't include those). EV is the cost incurred to date if we would have worked as per baseline. |
CV (Cost Variance) | EV - AC | -ve = Above Budget = Bad, +ve = Under Budget = Good |
SV (Schedule Variance) | EV - PV | -ve = Behind Schedule = Bad, +ve = Ahead Schedule = Good |
CPI (Cost Performance Index) | EV/ AC | = 1 = Good = On Target, > 1 = Good , <1 = Bad |
SPI (Schedule Perf Index) | EV/PV | = 1 = Good = On Target, > 1 = Ahead Schedule , <1 = Behind Schedule If project is close & SPI is <1 means the project got terminated |
EAC (estimate at completion) | 1) AC + ETC 2) BAC/CPI 3) AC + (BAC-EV) | There are many ways to calculate EAC 1) Actual + new estimate for remaining work. This is used when the original estimate is fundamentally flawed. 2) This formula is used if no variances from the BAC have occurred or you continue with the same rate of spending. 3) Actual to date + remaining budget. |
TCPI (To Complete Performance Index) | (BAC-EV) / (BAC - AC) | Work remaining to do divided by the money remaining to do. Values for the TCPI index of less than 1.0 is good because it indicates the efficiency to complete is less than planned. How efficient must the project team be to complete the remaining work with the remaining money? It answers the question "In order to remain within the budget what rate must be met for the remaining work?" |
ETC (Estimate to Complete) | (EAC-AC) | How much more does the project cost? Re-Estimate is the estimate from bottoms up |
VAC (Variance at Completion) | BAC - EAC | How much under or over budget will be at the end of the project |
Median | | The middle value that separates the higher half from the lower half of data. Exam: 4 is the median in 2,4,6 (middle value) 5 is the median in 2,4,6,8 ([4+6] /2) |
Mode | | The most frequent value in a given data set. Exam: 2 is the mode of 1,2,2,3 |
EMV (Expected Monetary Value) | P(Probability) * I (Impact) | P = Probability , I =Impact |
PTA (Point of Total Assumptions) - Procurement | PTA= ([Ceiling Price - Target Price] / Buyers Share Ratio) + Target Cost | Refers to the amount above which the seller bears all the loss of a cost overrun |
Est. To Complete (Percentage) | EV/ BAC | |
Present Value PV | FV / (1 + r)^n | |
Internal Rate of Return | Bigger is better (IRR) | |
Benefit Cost Ratio | | Bigger is better ((BCR or Benefit / Cost) revenue or payback VS. cost) Or PV or Revenue / PV of Cost |
Payback Period | Net Investment / Avg. Annual cash flow. | Less is better |
Sigma Ïƒ | - 1Ïƒ = 68.27%
- 2Ïƒ = 95.45%
- 3Ïƒ = 99.73%
6Ïƒ = 99.99985% | |
Return on Sales ( ROS )
| | Net Income Before Taxes (NEBT) / Total Sales OR Net Income After Taxes ( NEAT ) / Total Sales |
Return on Assets( ROA ) | NEBT / Total Assets OR NEAT / Total Assets | |
Return on Investment ( ROI ) | NEBT / Total Investment OR NEAT / Total Investment | |
Working Capital | Current Assets - Current Liabilities | |
Discounted Cash Flow | Cash Flow X Discount Factor | |
Contract related formulas | | Savings = Target Cost - Actual Cost Bonus = Savings x Percentage Contract Cost = Bonus + Fees Total Cost = Actual Cost + Contract Cost |