# Cost and Earned Value Health Policy

Cost and earned value health (short for cost health) is used to indicate the health of a project in terms of its work plan cost. Project cost health is indicated by the colored indicator in the project header.

The Cost and Earned Value Health policy controls which metrics will be enabled and used to determine the health.

In addition to the option settings below, to enable cost health tracking requires enabling financial management for work plan. See Cost and Effort Policy > Financial Management settings.

Option | Description
--- | ---
Allow project managers to override these settings? | Whether or not project managers can edit this policy in their projects.
If CPI is less than | CPI, the Cost Performance Index, is the cost efficiency ratio of the project's Earned Value to Actual Costs. CPI = Earned Value / Actual Cost (when Actual Cost ! = 0). If Earned Value is null, CPI is null. If Earned Value = 0 and Actual Cost = 0, CPI=1. If Earned Value ! = 0 and Actual Cost = 0, CPI = 0. For a healthy project, CPI should be near 1. Specify the threshold value of the red and yellow indicators. CPI values less than the threshold values turn the health indicator to red or yellow.
If SPI is less than | SPI, the Schedule Performance Index, is the difference in value between the scheduled completion of a task/project and its actual completion. SPI = Earned Value / Planned Value (when Planned Value ! = 0). If Earned Value is null, SPI is null. If Earned Value = 0 and Planned Value = 0, SPI=1. If Earned Value ! = 0 and Planned Value = 0, SPI = 0. For a healthy project, SPI should be near 1. Specify the threshold values of the red and yellow indicators. SPI values less than the threshold values turn the health indicator to red or yellow.
For prior months, if actual costs exceed the plan of record by | This is a comparison of project costs with the plan of record. It is a percentage calculated as [(Actual Cost - Plan of Record) /Plan of Record] * 100. Both the actual costs and plan of record are derived from the planned start period to the last day of the previous month. For example, if the planned start period is April 2009, and the current date is June 15, 2009, this calculation is based on actual costs and the plan of record from April and May of 2009. Specify the threshold value of the red and yellow indicators. the actual values less than the threshold values turn the health indicator to red or yellow. If a plan of record does not exist, this calculation is not used in the overall project cost health.

Any one of these factors can be enabled or disabled when calculating work plan cost health, but if more than one factor is enabled, the indicator represents the factor in the worst condition. If one factor out of three turns red, the cost health turns red.

### See also

- Project Health policy