Financial Analysis

---
name: financial-analysis
version: "1.0"
description: Analytical framework for financial data in executive deliverables. Provides templates for P&L summaries, variance analysis, ratio interpretation, and financial narrative.
tags: ["finance", "analysis", "quantitative"]
---

# Financial Analysis Skill

## When to use this skill

Use when a task involves financial data, P&L analysis, budget variance, or financial narrative writing.

## Standard financial sections

### P&L Summary Template

```
Revenue:          [Amount]  vs Prior Period: [Variance %]  vs Target: [Variance %]
Gross Margin:     [%]       vs Prior Period: [Delta pp]    Commentary: [1 sentence]
Operating Expenses:[Amount]  Key driver: [1 sentence]
EBITDA:           [Amount]  Margin: [%]
```

### Variance Analysis Framework

Always explain variances using this decomposition:

**Volume effect** + **Price/Rate effect** + **Mix effect** = **Total variance**

- Volume effect: change in revenue/cost due to more or fewer units
- Price/Rate effect: change due to pricing or rate changes at constant volume
- Mix effect: change due to shift toward higher or lower margin products/segments

Present the top 2-3 drivers only. Do not list every variance.

### Financial narrative rules

1. Lead with the bottom line: "Revenue exceeded target by X%..." not "In Q3, we saw..."
2. Explain the 2-3 largest drivers only - omit noise
3. Call out one-time items separately and label them explicitly
4. Connect financial results to strategic context: what does this mean for the plan?
5. End with the forward-looking implication or risk

## Comparison requirements

Per the executive profile, all financial data needs:
- **YoY comparison**: current period vs same period prior year, expressed as % change
- **QoQ comparison**: current period vs prior quarter, expressed as % change or delta
- **vs Target**: current period vs plan/budget, expressed as % variance

Format: `$120.3M (+4% vs target, +12% YoY, -2% QoQ)`

## Interpretation guidance

| Signal | Threshold | Action |
|--------|-----------|--------|
| Revenue growth | >10% | Strong; compare to market/competition in commentary |
| Margin compression | >200bps | Requires explanation in executive summary |
| Cost overrun | >5% | Flag in risk section with root cause |
| Working capital deterioration | >$5M | Note if cash flow story differs from P&L |

## Placeholders for missing data

When financial data is not yet available, use this format:

`[FINANCIAL DATA NEEDED: Q3 Revenue from Finance - contact: Marcus Webb - by: 2026-09-05]`

Never estimate financial figures or use prior period data without clearly labeling it as such.

## Risk section for financial content

When financial results show a risk, use this format:
- **Risk**: [Description]
- **Likelihood**: High / Medium / Low
- **Financial impact**: [$X] or [X% margin effect]
- **Mitigation**: [Current action or proposed action]