Cost Performance Index (CPI) & SPI: Formulas [2026]
A. Togay Koralturk, Best-Selling PMP Author
Last updated on September 22, 2026
10 min read
A single number can tell you whether every dollar on your project is buying a full dollar of work, and another tells you whether the work is keeping pace with the plan. Those two numbers are the cost performance index and the schedule performance index, and together they give you a fast, reliable read on project health. They come straight out of earned value, they take seconds to calculate, and they are among the most tested figures on the PMP. This guide explains the cost performance index and SPI — the formulas, how to read the values, a worked example, and how they are tested on the PMP and CAPM exams.
What is the cost performance index (CPI)?
The cost performance index (CPI) is a measure of a project's cost efficiency — how much value of work you are getting for each dollar you spend. It comes from earned value management, and its formula is a simple ratio of two of the base values:
> CPI = EV ÷ AC (earned value ÷ actual cost)
Earned value (EV) is the budgeted value of the work actually done; actual cost (AC) is what you spent to do it. Dividing one by the other tells you the return on every dollar: a CPI of 0.80 means you are getting 80 cents of work for every dollar spent, while a CPI of 1.10 means you are getting $1.10 of value per dollar. Because it is a ratio rather than a dollar gap, CPI is comparable across projects of any size — a small project and a mega-project can be measured on the same 1.0 scale.
How to interpret CPI
Reading CPI comes down to one reference point: 1.0 is breaking even. Above it is good, below it is bad, and how far from 1.0 tells you the size of the problem. The three cases:
| CPI value | Meaning |
|---|---|
| CPI > 1.0 | Under budget: the work is worth more than it cost |
| CPI = 1.0 | On budget — every dollar buys exactly a dollar of work |
| CPI < 1.0 | Over budget — the work is worth less than what was spent |
The further below 1.0, the deeper the trouble; a CPI of 0.70 is a serious overrun that is unlikely to recover on its own.
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Cumulative vs. single-period CPI
CPI comes in two horizons, and confusing them causes real misreads. Single-period CPI covers one reporting window (this month's earned value against this month's spend), and it jumps around: one large invoice or one strong delivery week can swing it dramatically without meaning much. Cumulative CPI divides all earned value to date by all actual cost to date, and the noise averages out.
The cumulative figure is the one with predictive power. Studies of hundreds of large defense programs found that cumulative CPI stabilizes remarkably early, typically by around 20% completion, and rarely improves much afterward. The implication matters: a project running a cumulative CPI of 0.85 a quarter of the way in is unlikely to climb back to 1.0, so do not build forecasts on the assumption that it will. This is exactly why the EAC formula divides the budget by cumulative CPI, and why an early red CPI is a real alarm, not noise. Watch the period CPI for what changed this month; trust the cumulative CPI for where the project is heading. On the exam, assume CPI means cumulative unless a question explicitly says otherwise.
What is the schedule performance index (SPI)?
The schedule performance index (SPI) is the schedule counterpart to CPI — a measure of how efficiently the project is progressing against its plan. It uses the same earned value, divided this time by planned value:
> SPI = EV ÷ PV (earned value ÷ planned value)
Planned value (PV) is the budgeted cost of the work that should be done by now. So SPI compares the work actually completed against the work planned: an SPI of 0.80 means the project is progressing at 80% of the planned pace (behind schedule), while an SPI of 1.10 means it is running 10% ahead. As with CPI, 1.0 is on plan, above is ahead, below is behind. One caveat worth remembering: SPI is measured in cost, not time, so it describes schedule progress in dollar terms rather than days ahead or behind.
CPI vs. SPI: reading them together
CPI and SPI measure different things (money and time) and they move independently. A project can be efficient with money but slow, or fast but over budget, so the real insight comes from reading the two together. Their four combinations map the whole picture:
| CPI | SPI | What it means |
|---|---|---|
| > 1 | > 1 | Under budget and ahead of schedule: the ideal |
| > 1 | < 1 | Under budget but behind schedule: spend the cost slack to recover time |
| < 1 | > 1 | Over budget but ahead of schedule: you bought speed with money |
| < 1 | < 1 | Over budget and behind schedule: the project in real trouble |
This is where the indexes earn their keep.
Worked example: calculating CPI and SPI
Take a project with a total budget (BAC) of $50,000. At the status date, the numbers are: earned value EV = $45,000, actual cost AC = $50,000, and planned value PV = $40,000. Running both indexes:
| Index | Calculation | Result | Reading |
|---|---|---|---|
| CPI | EV ÷ AC = 45,000 ÷ 50,000 | 0.90 | Over budget (90¢ per $1) |
| SPI | EV ÷ PV = 45,000 ÷ 40,000 | 1.13 | Ahead of schedule |
This is the instructive case where the two diverge: the project is over budget but ahead of schedule. It has done more work than planned (SPI 1.13) but paid too much to do it (CPI 0.90) — the team bought speed with money. Here the schedule is fine and the cost efficiency is the problem to address, perhaps by easing off the overtime or extra resources that pulled the schedule ahead.
Using CPI to forecast and control cost
CPI does more than report the past — it is the engine of cost forecasting. Because the cumulative CPI tends to stabilize once a project is roughly 15–20% complete, it becomes a reliable predictor of final cost, which is why the standard estimate at completion formula is built on it:
> EAC = BAC ÷ CPI
With our example's CPI of 0.90 and a $50,000 budget, the forecast total cost is $50,000 ÷ 0.90 ≈ $55,600 — a projected overrun of about $5,600 if the current efficiency holds. That predictive power is why CPI is watched so closely.
SPI comes with an important limitation for control: because it is measured in cost, it always drifts back toward 1.0 as the project finishes, since every dollar of planned work is eventually earned even on a late project. A schedule that finished three months late still shows SPI = 1.0 on its last day. For that reason, schedule performance is best watched alongside the critical path, and when a project is behind but has cost room, schedule compression is the usual lever.
CPI and SPI on the PMP® and CAPM® Exams
On the PMP exam, CPI and SPI are near-guaranteed to appear, almost always as calculation and interpretation. You will be handed EV, AC, and PV and asked for the indexes, or given a CPI and SPI and asked what they mean for the project. The formulas must be automatic (CPI = EV ÷ AC, SPI = EV ÷ PV) and the above/below-1 convention instant.
The harder questions test the combination: what to do when CPI is above 1 but SPI is below 1, which rewards recognizing that a cost surplus gives you room to fix the schedule rather than a reason to relax. The most common error is mixing up which index is which, or reading below-1 as good. The CAPM tests the same two formulas a little more directly, often a single calculation, but still expects you to state what the result means. Our PMP Complete Study Guide, the most complete on the market, drills these calculations with worked scenarios until they are second nature.
PMP Practice Question: Cost Performance Index
Six months into a 10-month, $400,000 project, the cumulative figures are: planned value $240,000, earned value $210,000, actual cost $200,000. This month's report also shows a single-period CPI of 0.70, driven by a large one-time equipment invoice that landed this month. The sponsor sees the 0.70, calls the project inefficient, and demands immediate cost cuts.
What should the project manager do?
a) Implement the cost cuts, since a CPI of 0.70 signals serious cost inefficiency and the sponsor has already seen the number.
b) Compute the cumulative indexes, show the sponsor that the project is under budget with CPI 1.05 and behind schedule with SPI 0.875, and direct the response at the schedule, which the cost headroom can help recover.
c) Take no action on cost or schedule, since the cumulative CPI is above 1.0 and the project is therefore fundamentally healthy.
d) Reduce spending until the period CPI returns above 1.0, then use the surplus to crash the schedule back on plan.
Correct answer: B.
Rationale: The arithmetic comes first: cumulative CPI = 210,000 ÷ 200,000 = 1.05, and SPI = 210,000 ÷ 240,000 = 0.875. The project is under budget and behind schedule, and the alarming 0.70 is a single-period reading distorted by a one-time invoice — exactly the kind of noise cumulative figures exist to smooth out. Choice a) acts on the wrong horizon under sponsor pressure, cutting costs on a project that is already spending efficiently, which starves the one thing it actually needs: schedule recovery. Choice c) reads only half the picture, because a healthy CPI does not excuse an SPI of 0.875, and waiting will not earn the time back. Choice d) sounds disciplined but manages the noise instead of the project: period CPI will correct on its own next month once the one-time invoice washes out, and delaying schedule action until a noisy number improves just makes the real problem older. The professional move computes the cumulative indexes, explains the period distortion, and spends the cost headroom where the project is actually failing. To face more questions where the data must be computed before the politics can be answered, work through our PMP practice exams or, at the entry level, our CAPM practice exams.
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Frequently asked questions
What is the cost performance index (CPI)?
The cost performance index is a measure of a project's cost efficiency, calculated as earned value divided by actual cost (CPI = EV ÷ AC). It shows how much value of work you get for each dollar spent. A CPI above 1.0 means the project is under budget, exactly 1.0 means on budget, and below 1.0 means over budget.
What is the CPI formula?
The CPI formula is CPI = EV ÷ AC, where EV is earned value (the budgeted value of the work actually completed) and AC is actual cost (what was spent to do it). For example, an earned value of $45,000 against an actual cost of $50,000 gives a CPI of 0.90, meaning the project is over budget.
What is the schedule performance index (SPI)?
The schedule performance index measures a project's schedule efficiency, calculated as earned value divided by planned value (SPI = EV ÷ PV). An SPI above 1.0 means the project is ahead of schedule, exactly 1.0 means on plan, and below 1.0 means behind schedule. It is measured in cost terms, not days.
What does a CPI less than 1 mean?
A CPI less than 1.0 means the project is over budget — the work completed is worth less than what was spent to complete it. A CPI of 0.80, for instance, means the project is getting only 80 cents of value for every dollar spent. The further below 1.0, the larger the cost overrun in efficiency terms.
What is the difference between CPI and SPI?
CPI (EV ÷ AC) measures cost efficiency (value earned per dollar spent), while SPI (EV ÷ PV) measures schedule efficiency (work done versus work planned). They are independent: a project can be under budget but behind schedule, or over budget but ahead. Reading them together shows whether cost, schedule, or both need attention.
Are CPI and SPI on the PMP exam?
Yes. The cost performance index and schedule performance index are among the most reliably tested figures on the PMP exam. You are expected to calculate them from earned value data, apply the above-or-below-1.0 convention, and interpret what a given combination of the two means for the project's health and what action it calls for.
Are CPI and SPI on the CAPM exam?
Yes. The CAPM covers both indexes, usually a little more directly than the PMP — often a single CPI or SPI calculation. Because the CAPM is scenario-based, you should be ready not only to compute the value but to say whether it means the project is over or under budget, ahead of or behind schedule.
Estimate at Completion (EAC): Formulas & Example [2026]
Estimate at completion (EAC) forecasts a project's final cost: the four EAC formulas and when to use each, plus ETC, VAC, TCPI, and how it is tested on the PMP.
