Cost Performance Index (CPI)

The Cost Performance Index (CPI) expresses cost efficiency as a single ratio: the Earned Value of work completed divided by the Actual Cost incurred to complete it (CPI = EV / AC).

A CPI of 1.0 means you are getting exactly one unit of value for every unit of cost - on budget. Above 1.0 means you are earning more value than you are spending, so the work is under budget; below 1.0 means it is over. For example, if EV is 90,000 and AC is 100,000, the CPI is 0.90 - every euro spent has returned 90 cents of budgeted value.

CPI is one of the most stable EVM indicators: research on large project portfolios shows it tends to settle early and rarely improves on its own, which is why it underpins the standard Estimate at Completion forecast EAC = BAC / CPI. Read it together with the Schedule Performance Index to separate cost problems from schedule problems.