Actual cost (AC): This can also be measured in dollars or time. In a perfectly executed project, EV and AC are the same. But in our example, let's say we actually used $60 in resources to buy that system. Our AC is $60.

Once you have these figures -- PV, BAC, EV and AC -- you can calculate other numbers that tell you about your progress on a project. Here are some of those calculations:

Schedule performance index (SPI): EV divided by PV for a particular phase of a project. In our example, that's 50/50 = 1, a perfect score for Phase 1, indicating that we're on target for schedule. "I said I'd do $50 worth of work, and I did $50 worth of work," McCauley says.

Cost performance index (CPI): EV divided by AC. For our project that's 50/60 = 0.83, indicating that we're underperforming for our costs. "For every dollar I'm spending, I'm only getting 83 cents worth of work," McCauley explains.

In a perfect project, the answer is 1. But most projects fall below that because most projects miss their targets.