How to use the cost ratio calculator
Cost ratio against the execution budget is the simplest health check on a job: money spent divided by money budgeted. On its own it says nothing about whether the spending was earned, which is why percent complete belongs in the same calculation.
With percent complete entered, the calculator produces a cost performance index, the budgeted cost of work performed divided by the actual cost. Above 1.0 the job is getting more work done per dollar than budgeted, below 1.0 the budget is draining faster than progress is being earned.
The estimate at completion projects the current efficiency to the end of the job, and subtracting it from the contract value gives the forecast profit and margin. Early in the schedule the sample is small and the projection swings widely, so the figure becomes dependable somewhere past twenty to thirty percent complete.
Recording the index every month turns a snapshot into a trend, which is what separates a one-off cost spike from a structural overrun. A steadily falling index is the signal to revisit the unit rates or the construction method assumed in the execution budget.
Frequently asked questions
Cost ratio only says how much of the budget has been spent, with no reference to how much work is finished. The cost performance index divides the budgeted cost of the work actually performed by the money spent, so it measures value received per dollar rather than burn rate.
Actual cost to date is divided by percent complete, which assumes the remaining work will be delivered at the same cost efficiency as the work so far. Early in a job, when temporary works and mobilization dominate spending, the projection tends to look worse than the final outcome.
Not necessarily. Buying material early or setting up formwork and scaffolding front loads cost without matching progress. It becomes a warning sign when the gap persists over several reporting periods rather than closing as installation catches up.