When to use it
Use it to see whether the volume of budgeted work delivered matches the plan.
Do not interpret a money variance as a number of days late.
- Define the scope, status date and units before collecting the inputs.
- Substitute the values into the formula and retain their units.
- Interpret the result against the assumptions and decide what evidence or action is needed next.
Formula & inputs
EV is earned value; PV is planned value. Both use budgeted prices.
Worked example
A delivery project has budget at completion of €900,000. At the same status date, planned value is €450,000, earned value is €360,000 and actual cost is €400,000. All values use the same scope and price basis.
Less budgeted work is complete than planned. Check the actual dependency schedule to estimate the effect on the finish date.
Common pitfall
The measure loses its usefulness near completion and does not identify the critical path.
Source & related material
Standard quantitative technique; this explanation is by fannarmaximus. No single inventor is claimed. The arithmetic is computed from explicit inputs, not copied from an official sample question.