Income Statement Generation

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Important: This skill assists with financial statement workflows but does not provide financial advice. All statements should be reviewed by qualified financial professionals before use in reporting or filings.

Generate an income statement with period-over-period comparison and variance analysis. Highlight material variances for investigation.

Usage

You can ask to generate an income statement for a specific period (e.g., "Generate an income statement for Q4 2024" or "Show me the P&L for December").

Arguments

• period-type — The reporting period type:
• monthly — Single month P&L with prior month and prior year month comparison
• quarterly — Quarter P&L with prior quarter and prior year quarter comparison
• annual — Full year P&L with prior year comparison
• ytd — Year-to-date P&L with prior year YTD comparison
• period — The period to report (e.g., 2024-12, 2024-Q4, 2024)

Workflow

1. Gather Financial Data

If an ERP or data warehouse is connected:

• Pull trial balance or income statement data for the specified period
• Pull comparison period data (prior period, prior year, budget/forecast)
• Pull account hierarchy and groupings for presentation

If no data source is connected:

Connect an ERP or data warehouse to pull financial data automatically. You can also paste trial balance data, upload a spreadsheet, or provide income statement data for analysis.

Prompt the user to provide:

• Current period revenue and expense data (by account or category)
• Comparison period data (prior period, prior year, and/or budget)
• Any known adjustments or reclassifications

2. Generate Income Statement

Present in standard multi-column format:

INCOME STATEMENT
Period: [Period description]
(in thousands, unless otherwise noted)

                              Current    Prior      Variance   Variance   Budget    Budget
                              Period     Period     ($)        (%)        Amount    Var ($)
                              --------   --------   --------   --------   --------  --------
REVENUE
  Product revenue             $XX,XXX    $XX,XXX    $X,XXX     X.X%       $XX,XXX   $X,XXX
  Service revenue             $XX,XXX    $XX,XXX    $X,XXX     X.X%       $XX,XXX   $X,XXX
  Other revenue               $XX,XXX    $XX,XXX    $X,XXX     X.X%       $XX,XXX   $X,XXX
                              --------   --------   --------              --------  --------
TOTAL REVENUE                 $XX,XXX    $XX,XXX    $X,XXX     X.X%       $XX,XXX   $X,XXX

COST OF REVENUE
  [Cost items]                $XX,XXX    $XX,XXX    $X,XXX     X.X%       $XX,XXX   $X,XXX
                              --------   --------   --------              --------  --------
GROSS PROFIT                  $XX,XXX    $XX,XXX    $X,XXX     X.X%       $XX,XXX   $X,XXX
  Gross Margin                XX.X%      XX.X%

OPERATING EXPENSES
  Research & development      $XX,XXX    $XX,XXX    $X,XXX     X.X%       $XX,XXX   $X,XXX
  Sales & marketing           $XX,XXX    $XX,XXX    $X,XXX     X.X%       $XX,XXX   $X,XXX
  General & administrative    $XX,XXX    $XX,XXX    $X,XXX     X.X%       $XX,XXX   $X,XXX
                              --------   --------   --------              --------  --------
TOTAL OPERATING EXPENSES      $XX,XXX    $XX,XXX    $X,XXX     X.X%       $XX,XXX   $X,XXX

OPERATING INCOME (LOSS)       $XX,XXX    $XX,XXX    $X,XXX     X.X%       $XX,XXX   $X,XXX
  Operating Margin            XX.X%      XX.X%

OTHER INCOME (EXPENSE)
  Interest income             $XX,XXX    $XX,XXX    $X,XXX     X.X%
  Interest expense           ($XX,XXX)  ($XX,XXX)   $X,XXX     X.X%
  Other, net                  $XX,XXX    $XX,XXX    $X,XXX     X.X%
                              --------   --------   --------
TOTAL OTHER INCOME (EXPENSE)  $XX,XXX    $XX,XXX    $X,XXX     X.X%

INCOME BEFORE TAXES           $XX,XXX    $XX,XXX    $X,XXX     X.X%
  Income tax expense          $XX,XXX    $XX,XXX    $X,XXX     X.X%
                              --------   --------   --------

NET INCOME (LOSS)             $XX,XXX    $XX,XXX    $X,XXX     X.X%       $XX,XXX   $X,XXX
  Net Margin                  XX.X%      XX.X%

3. Variance Analysis

For each line item, calculate and flag material variances:

Materiality thresholds (flag if either condition met):

• Dollar variance exceeds a defined threshold (e.g., $50K, $100K — ask user for their threshold)
• Percentage variance exceeds 10% (or user-defined threshold)

For flagged variances, provide:

• Direction and magnitude of the variance
• Possible drivers (if data is available to decompose)
• Questions to investigate
• Whether the variance is favorable or unfavorable

4. Key Metrics Summary

KEY METRICS
                              Current    Prior      Change
Revenue growth (%)                                  X.X%
Gross margin (%)              XX.X%      XX.X%      X.X pp
Operating margin (%)          XX.X%      XX.X%      X.X pp
Net margin (%)                XX.X%      XX.X%      X.X pp
OpEx as % of revenue          XX.X%      XX.X%      X.X pp
Effective tax rate (%)        XX.X%      XX.X%      X.X pp

5. Material Variance Summary

List all material variances requiring investigation:

6. Output

Provide:

1. Formatted income statement with comparisons
2. Key metrics summary
3. Material variance listing with investigation flags
4. Suggested follow-up questions for unexplained variances
5. Offer to drill into any specific variance