The Cost Performance Index (CPI) formula is the key metric used in business to measure and monitor a project’s cost performance. It measures the amount of work completed relative to the amount of money spent on that particular project, which gives an estimator, supervisor or manager valuable insight about how efficient the team is with their finances. To calculate CPI, simply divide the actual cost incurred so far by the budgeted cost for the same amount of work. If the CPI is less than 1, it indicates that more money has been spent than planned; if the CPI is greater than 1, it means the team is performing well – working efficiently and within their budget. In short, CPI helps you to track costs and assess whether value for money is being achieved.