What is the Cost Performance Index (CPI)?

CPI is the ratio of Earned Value to Actual Cost. It tells you how many dollars of budgeted work the project earns for every dollar actually spent.

What is the formula for CPI?

CPI = EV / AC, where EV is Earned Value and AC is Actual Cost.

What does a CPI of 0.85 mean?

A CPI of 0.85 means the project is producing only 85 cents of value for every dollar spent — a 15 percent cost overrun on completed work.

Is a higher CPI always better?

A CPI greater than or equal to 1.0 is favorable, but very high CPI values may also signal that the original budget was inflated or that work is being recorded as earned faster than it is actually being performed.

How is CPI different from Schedule Performance Index?

CPI measures cost efficiency (EV ÷ AC). SPI measures schedule efficiency (EV ÷ PV). A project can be on schedule but over budget, or on budget but behind schedule.

Cost Performance Index (CPI) Calculator

Compute the Cost Performance Index instantly. CPI tells you how efficiently your project converts spend into completed work — divide Earned Value by Actual Cost.

Last reviewed: 3 May 2026 · Source: Project Management Institute, The Standard for Earned Value Management

EV Earned Value

AC Actual Cost

CPI = EV / AC

N/A

Enter values

How to interpret CPI

Range	Meaning
CPI > 1.0	Favorable. Each dollar spent has produced more than a dollar of budgeted work.
CPI = 1.0	Exactly on budget. Earned and actual cost match.
CPI < 1.0	Unfavorable. The project is over budget on completed work.

Worked example

A construction project has reported $35,000 of Earned Value and $38,000 of Actual Cost at the end of month 3. The Cost Performance Index is:

CPI = 35,000 / 38,000 = 0.921

The project is delivering only 92.1 cents of value per dollar spent. Forecasting forward, if this rate continues and the original BAC was $120,000, the Estimate at Completion would be EAC = 120,000 / 0.921 = $130,293 — an $10,293 projected overrun. Use the EAC Calculator to extend this analysis.

Common mistakes when computing CPI

Confusing EV with PV. Earned Value is the budgeted cost of work actually completed, not the budget originally scheduled (which is Planned Value).
Using committed cost instead of Actual Cost. AC is the cost actually incurred, not purchase orders or commitments outstanding.
Mixing currencies or units. EV and AC must be in the same currency and time basis (cumulative-to-date or period-to-date, but not one of each).
Ignoring scope changes. If the BAC has been re-baselined, EV must be recomputed against the new baseline before CPI is meaningful.

Frequently asked questions

What is a "good" CPI value?

For project controls purposes, CPI ≥ 0.95 is generally tolerable, 1.0 is on budget, and ≥ 1.05 is healthy. Below 0.90 is typically a control trigger. Industry tolerances vary — defense and aerospace programs often use ±5% bands.

Can CPI be negative?

No. Both EV and AC are non-negative quantities (you cannot un-perform work, and actual costs cannot be negative). CPI ranges from 0 (no value earned despite spending) upward.

How often should CPI be recalculated?

Most monthly project status reports compute CPI cumulatively at the data date. Programs with weekly cadence may compute period CPI for early-warning purposes.

How does CPI relate to TCPI?

CPI looks at past performance. TCPI looks forward and tells you the cost performance required on remaining work to finish at the original BAC. If CPI is below 1.0, TCPI will be above 1.0 — a warning that future work must be more efficient than the plan.

Related references

Disclaimer: This calculator is provided as an educational reference. It is not professional project management or financial advice. Always verify results against your organization's project controls policies and the latest PMI / PMBOK guidance.