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# Determining Value and Risk Ratings

Lifecycle entities (proposals/projects/assets) can be evaluated and ranked by numerical values of cost, resource requirement, and benefit. They can also be evaluated and ranked by Risk Rating, Value Rating, and Total Score.

- Risk Rating

  Risk Rating is a numerical value that helps evaluate the risk of a lifecycle entity. It depends on the selection for each field in the Risk Ratings section of the lifecycle entity. Each field (served as criterion) has a weight associated; each drop-down text of a field has a numerical value associated.

  Risk Rating = Sum (Weight for each field * Numerical value for each drop-down text)

- Value Rating

  Value Rating is a numerical value that helps evaluate the business value of a lifecycle entity. It depends on the selection of each field in the Value Ratings section of the lifecycle entity. Each field (served as criterion) has a weight associated; each drop-down text of a field has a numerical value associated.

  Value Rating = Sum (Weight for each field * Numerical value for each drop-down text)

- Total Score

  Total Score = Value Rating - Risk Rating + Score Adjustment

  where Score Adjustment is a field provided with each lifecycle entity to allow automatic adjustment of Risk Rating and Value Rating.

  Example: A confident project sponsor might enter `10` in the Score Adjustment field, raising the Total Score by 10 points. Someone who thinks the project is riskier than the calculations indicate might enter `-5`, lowering the Total Score by 5 points.

For information about changing or adding scoring criteria and their values, see the Portfolio Management Configuration Guide.

https://admhelp.microfocus.com PPM 8942
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