A method and system for monitoring health of virtual environment includes receiving input data for one or more virtual machines in the virtual environment. A number of entitled CPU cycles for each of the virtual machines based on the input data are determined. A number of actual CPU cycles obtained by each of the virtual machines based on the input data are computed. The number of entitled CPU cycles is compared with the number of actual CPU cycles for each of the virtual machines. A health status of the virtual machines based on the comparison is displayed.