fortax-variance-analysislisted

# Variance analysis Decompose variances, set materiality, write the reason for each material movement, and bridge from one figure to the other. This skill helps prepare the analysis; the CA reviews it before it goes into a report, an audit file or a client meeting. **Numbers come from a workbook with formulas** (`fortax-xlsx-manipulation`): the current and comparison figures are pulled from the trial balances or MIS, and every variance, effect and percentage is a formula. The narrative quotes those cells; it never recomputes them. ## Inputs - The two sets being compared: current vs previous period (TB or P&L), actual vs budget, actual vs forecast. Same ledger mapping on both sides — map with `fortax-financial-statements` Step 1 first. - Drivers where available: quantities and rates (sales register by item, purchase register), headcount and salary register, price lists, the list of one-time items. - The ledgers themselves, to find reasons. A reason is found in the entries, not invented. ## Decomposition techniques ### Price / volume The basic decomposition, for revenue, cost of goods and anything expressible as price x volume. ``` 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 Check: Volume effect + Price effect = Total variance (when mix is embedded in the pr