PMBOK FORMULAS PMBOK FORMULAS

TOPIC FORMULA (or Description) TOPIC FORMULA (or Description)

Normal Distribution:
Order of Magnitude Estimate --> ´-25% a +75% (PMBOK: -50% a +100%)

PERT + TIME

ESTIMATES + COMMUNICATIONS
(P + 4M + O)/ 6 Pessimistic, Most Likely, Optimistic
PERT Budget Estimate --> ´-10% a +25%
Triangular Distribution:
Definitive Estimate --> ´-5% a +10%
(P + M + O)/ 3

Standard Deviation (P - O) / 6 Number of Communication Channels N(N -1)/2

Variance (Task) [(P - O)/6]^2 Expected Monetary Value Probability * Impact

Variance (Project) (∑(Standard Deviation)^2)square root PTA (Point of Total Assumption) ((Ceiling Price - Target Price)/Buyer's Share Ratio) + Target Cost

Float or Slack LS-ES and LF-EF 1σ = 68.27%

CV (Cost Variance) EV - AC 2σ = 95.45%

Sigma σ
SV (Schedule Variance) EV - PV 3σ = 99.73%

CPI (Cost Performance Index ) EV / AC 6σ = 99.99985%

SPI (Schedule Performance Index) EV / PV Net Income Before Taxes (NEBT) / Total Sales or
ROS (Return on Sales)
BAC / CPI Net Income After Taxes ( NEAT ) / Total Sales

FINANCIAL
AC + ETC -- Initial Estimates are Flawed NEBT / Total Assets or
EAC (Estimate At Completion) ROA (Return on Assets)
AC + BAC - EV -- Future Variance are Atypical NEAT / Total Assets

AC + (BAC - EV) /SPIxCPI -- Future Variance Would be Typical NEBT / Total Investment or
ROI (Return on Investment)
ETC (Estimate To Complete ) EAC - AC NEAT / Total Investment

EARNED VALUE
Percentage Complete (EV / BAC)x100 Working Capital Current Assets - Current Liabilities

Percentage Spend (AC / BAC)x100

VAC (Variance At Completion) BAC - EAC Discounted Cash Flow Cash Flow x Discount Factor

TCPI (To Complete Performance Index)
Values for the TCPI index of less then 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 Savings = Target Cost – Actual Cost
work with the remaining money?
( BAC - EV ) / ( BAC - AC )

CONTRACTS
NPV (Net Present Value) Bigger is better…

PV (Present Value) FV / (1 + r)^n Bonus = Savings x Percentage

Contracts Related Formulas
IRR (Internal Rate of Return) Bigger is better…

Bigger is better ((BCR or Benefit / Cost) Revenue or

BCR (Benefit Cost Ratio) Payback vs. Cost) Contract Cost = Bonus + Fees
Or PV or Revenue / PV of Cost

Less is better…
Payback Period
Net Investment / Avg. Annual Cash Flow
BCWS PV Total Cost = Actual Cost + Contract Cost

BCWP EV

ACWP AC