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Decompose financial variances into drivers with narrative explanations and waterfall analysis.
Passed 18 of 22 test cases with the skill, and 17 of 22 without it.
2 fixed16 passed either way3 still failing1 broke
Tokens, turns and time describe resource use, not a dollar price.
One of 2 test cases the skill fixed. Same model, same prompt, with and without the skill.
For Month-over-Month (MoM) sequential operational trend tracking, what percentage variance trigger threshold should be applied to separate operational noise from significant movement?
| Checked | Without skill | With skill |
|---|---|---|
| Applies a 20% percentage threshold for sequential Month-over-Month variance triggers. | Missed | Passed |
The instructions your model reads when the skill loads.
Important: This skill assists with variance analysis workflows but does not provide financial advice. All analyses should be reviewed by qualified financial professionals before use in reporting.
Techniques for decomposing variances, materiality thresholds, narrative generation, waterfall chart methodology, and budget vs actual vs forecast comparisons.
The most fundamental variance decomposition. Used for revenue, cost of goods, and any metric that can be expressed as Price x Volume.
Formula:
Total Variance = Actual - Budget (or Prior)
Volume Effect = (Actual Volume - Budget Volume) x Budget Price
Price Effect = (Actual Price - Budget Price) x Actual Volume
Mix Effect = Residual (interaction term), or allocated proportionally
Verification: Volume Effect + Price Effect = Total Variance
(when mix is embedded in the price/volume terms)
Three-way decomposition (separating mix):
Volume Effect = (Actual Volume - Budget Volume) x Budget Price x Budget Mix
Price Effect = (Actual Price - Budget Price) x Budget Volume x Actual Mix
Mix Effect = Budget Price x Budget Volume x (Actual Mix - Budget Mix)
Example — Revenue variance:
test cases passed, vs 17 / 22 without
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