Agent skill · business finance · anthropics
variance-analysis
Decompose financial variances into drivers with narrative explanations and waterfall analysis. Use when analyzing budget vs. actual, period-over-period changes, revenue or expense variances, or preparing variance commentary for leadership.
Why this skill is useful
Provides specific variance decomposition techniques and formulas that enhance financial analysis capabilities.
What it needs
About 7k tokens when loaded. Last updated 2026-08-07. 23,345 stars on the source repository.
What this skill does
Variance Analysis 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. Variance Decomposition Techniques Price / Volume Decomposition The most fundamental variance decomposition. Used for revenue, cost of goods, and any metric that can be expressed as Price x Volume. Formula: Three-way decomposition (separating mix): Example — Revenue variance: Budget: 10,000 units at $50 = $500,000 Actual: 11,000 units at $48 = $528,000 Total variance: +$28,000 favorable Volume effect: +1,000 units x $50 = +$50,000 (favorable — sold more units) Price effect: -$2 x 11,000 units = -$22,000 (unfavorable — lower ASP) Net: +$28,000 Rate / Mix Decomposition Used when analyzing blended rates across segments with different unit economics. Formula: Example — Gross margin variance: Product A: 60% margin, Product B: 40% margin Budget mix: 50% A, 50% B → Blended margin 50% Actual mix: 40% A, 60% B → Blended margin 48% Mix effect explains 2pp of margin compression Headcount / Compensation Decomposition Used for analyzing payroll and people-cost variances. Spend Category Decomposition Used for operating expense analysis when price/volume is not applicable. Materiality Thresholds and Investigation Triggers Setting Thresholds Materiality thresholds determine which variances require investigation and narrative explanation. Set thresholds based on: 1. Financial statement materiality: Typically 1-5% of a key benchmark (revenue, total assets, net income) 2. Line item size: Larger line items warrant lower percentage thresholds 3. Volatility: More volatile line items may need higher thresholds to avoid noise 4. …
How to use it
Reference it in AdaL, Claude Code, Cursor or any coding agent — nothing to install:
@skills anthropics/variance-analysis