# Sales pipeline quality: what EFV Density can and cannot say

> Sales pipeline quality and EFV Density: EFV Density is rEFV as a share of open pipeline volume, not a quality grade. Formula, example, contrast with pipeline coverage.

Canonical: https://funneleconomics.ai/resources/glossary/efv-density

EFV Density is rEFV as a share of total pipeline volume, both at the end of the period. EFV Density has no ideal value and no good direction. Anyone asking about sales pipeline quality gets a share from EFV Density, not a grade: how much expected value sits in each euro of open pipeline.

## How is EFV Density calculated?

:::formel
EFV Density = rEFV at period end ÷ pipeline volume at period end

- rEFV at period end – the risk-adjusted revenue expectation for the opportunities open at that point
- Pipeline volume at period end – the sum of the amounts of all opportunities open at the same point (gross volume, not a count)
:::

EFV Density is a term of the method. No Funnel Economics tool reports EFV Density, neither Funnel Economics Core nor the optional add-on Funnel Economics Strategist.

The level of EFV Density says how much risk-adjusted expectation stands per euro of open pipeline. Across different mixes of the pipeline it is not comparable. It is not a grade: deals that are won lower EFV Density too.

The method assigns EFV Density to a **BUILD model**. A BUILD model measures how the pipeline develops for future periods and uses end-of-period values.

## What does a falling EFV Density mean?

A falling EFV Density can have four causes. That is a reading of the formula, not a measurement. First, the mix of the pipeline has shifted towards opportunities with a lower expectation. Second, stage win rates have fallen. Third, the measured factors per band have changed.

Fourth, deals were won. Deals that are won leave the open stock; that lowers EFV Density mechanically, without the pipeline having become worse.

EFV Density can also fall while pipeline volume falls. That is a question, not a warning. The question is held against the actual of the same period, read from [EFV Ratio, the actual divided by rEFV at the start of the period](https://funneleconomics.ai/resources/glossary/efv-ratio). If the actual is at or above the forecast, the decline is first of all outflow through winning.

:::example
Illustrative example with invented numbers: at the end of a period, pipeline volume is €3,940,000 and rEFV €1,063,800. EFV Density is €1,063,800 ÷ €3,940,000 = 0.27. One period later, pipeline volume is €4,870,000 and rEFV €1,120,100. EFV Density is 0.23. The pipeline has grown, the expected value hardly. The density falls because volume grew faster than rEFV; which of the four causes lies behind it, the number does not say. A strong quarter can lower EFV Density too, because deals that are won leave the stock.
:::

## Why does pipeline coverage not measure pipeline quality?

Funnel Economics calculates nominal pipeline coverage as quantity against target: the open pipeline volume divided by the remaining gap to target.

It follows from this formula that every open opportunity counts at its full amount. The stage win rate and SLA Health do not enter nominal pipeline coverage.

EFV Density sets rEFV against the volume of the same pipeline, with no target as a reference. It follows arithmetically: a pipeline can cover the target in quantity and still have a low EFV Density.

If pipeline volume at period end grows over several periods while rEFV falls, the pattern is called [Strategic Decoupling](https://funneleconomics.ai/resources/patterns/strategic-decoupling).

## How EFV Density differs from pipeline coverage and from EFV Ratio

EFV Ratio looks back at the execution of a period, EFV Density looks ahead at the open pipeline.

| | Pipeline coverage (nominal) | EFV Density | EFV Ratio |
|---|---|---|---|
| Describes | open pipeline against the target | rEFV as a share of pipeline volume | revenue won relative to rEFV |
| Reference | target minus revenue won | pipeline volume at period end | rEFV at period start |
| Use | quantity: is there enough pipeline? | share: how much of it is to be expected? | review: was the expected value won? |

## FAQ

### What is pipeline coverage and how is it calculated?

Pipeline coverage sets the quantity of open pipeline against the target. Funnel Economics calculates nominal pipeline coverage as the open pipeline volume divided by the remaining gap to target, meaning the target minus the revenue already won. Every open opportunity counts at its full amount.

### Why does pipeline coverage not measure pipeline quality?

Nominal pipeline coverage, as Funnel Economics calculates it, uses the full volume of the open pipeline. It follows from the formula that the stage win rate and the SLA Health of the individual opportunities do not enter the calculation. EFV Density instead sets rEFV against the pipeline volume at the end of the period. EFV Density therefore describes which share of the open volume is expected value.

### What does a falling EFV Density mean?

A falling EFV Density can have four causes, read from the formula: the mix of the pipeline has shifted, stage win rates have fallen, the measured factors per band have changed, or deals were won and have left the stock. If the pipeline volume at the end of the period falls at the same time, that is a question, not a warning. It is held against the actual of the same period: if the actual is at or above the forecast, the decline is first of all outflow through winning.

### Where do I find EFV Density in Funnel Economics?

EFV Density is a term of the Funnel Economics method. No tool reports EFV Density, neither the dashboards of Funnel Economics Core nor the optional add-on Funnel Economics Strategist. This entry describes EFV Density as rEFV as a share of pipeline volume at the end of the period, not as a quality measure.