Financial Metrics in Projects

There are many ratios that would indicate to project managers whether the financing forecast for the project is on schedule or not. Managers will look at many ratios such as the ROI, Cost Performance Index (CPI), and the Schedule Performance Index (SPI). The CPI tells you how actual project expenditures relate to the original project budget. SPI tells you whether progress on the project's many activities is ahead or behind the project plan. Both SPI and CPI tell you whether you have spent more or less than the original project plan allowed, and for the amount that you have spent so far, how far you have progressed in the project schedule.
A good project plan will be on budget with little variance. If the project is behind schedule, a financial plan would allow the project team in making a decision whether or not there are any extra sufficient funds to use in hiring more people to speed up the process. If not, the project team with the sponsors should take a look at the financial plan and see if any adjustment could be made such as acquire more funding to meet the deadline. A project not finishing on time would cost more money than to actually acquire the extra funding while the project is still in progress.