Planned Value PV):

... is the PLAN of how the contractor has timephased his resources to accomplish the contractual work.

Budget at Completion (BAC):

... is the total planned cost, when the plan was put into place. The contractor has allocated this amount of resources to accomplish the work.

Earned Value(EV):

... or "Earned Value", represents the contractor's performance or achievement against his PLAN. Any deviation indicates that the contractor is varying from his original plan.

At any given time, the Schedule Variance (SV), or the vertical distance between EV and PV, represents the value of work not completed which had intended to be completed by that date.

As it is not possible to tell whether or not the unachieved work is on the Critical Path, the extent of slippage (if any) cannot be ascertained.

Nevertheless, the existence of a schedule variance is cause for concern, and an indication that something might be wrong. Schedule progress should be carefully checked.

Actual Cost (AC):

... is how much it cost to do the work actually achieved (EV) against the plan.

Cost Variance (CV):

... is the difference between the value (as planned) of the work achieved and the cost (in reality) of the work achieved : ie EV - AC.

A negative cost variance therefore represents a cost overrun (as seen on this chart).

Based on both cost and schedule performance, an Estimate at Completion (EAC) can be derived, either by calculation or more subjective means. This is a revised estimate of the total cost of the project.

From the EAC is derived the Variance at Completion (VAC), or total project cost overrun or underrun.

From schedule performance, total slippage can be calculated.

Note that the estimated amount of slippage for the whole project is less than the horizontal difference between the PV and EV curves. This difference gives an indication of how much of the as yet unachieved work is on the Critical Path.

Also note that at project completion, SV = 0 (by definition).