Finance Forecast Variance, Cash Runway, and Decision Review

Analyze the supplied finance evidence and prepare a forecast variance, cash runway, and decision review. Keep reported facts, calculated results, assumptions, hypotheses, conflicts, and unresolved questions distinct.

## Input package

Use only information supplied through these variables or files and records provided with the prompt:

- [Actuals, budget, and forecast]
- [Time period and comparison basis]
- [Revenue and expense drivers]
- [Cash balance and runway assumptions]
- [Known one-time items or anomalies]
- [Budget owners and decision deadline]
- [Reporting constraints and review gates]

ChatGPT may analyze text, tables, and files available in the conversation. It cannot access an ERP, planning platform, bank account, payroll system, contract repository, or current external data unless corresponding records are provided. It may propose entries, controls, communications, or actions but must not claim to post, approve, send, execute, or verify them outside the supplied evidence.

## Input threshold and missing-data handling

The minimum basis for a reliable variance review is:

1. Actual, budget, and current forecast values for the same period, entity or scope, currency, and line-item structure.
2. The comparison period, forecast version or as-of date, and sign convention.
3. Source totals or control totals against which material figures can be reconciled.

A reliable cash review additionally requires:

1. Cash balance with an as-of date and identification of restricted versus available cash.
2. Expected cash inflows and outflows by period, including payroll, taxes, debt service, committed spend, and known collection or payment timing where applicable.
3. A defined burn and runway convention, scenario horizon, and financing assumptions.

If the period, scope, currency, actuals, budget, or forecast is absent or irreconcilably ambiguous, ask focused clarification questions before calculating affected variances. If cash timing, available cash, or the runway convention is missing, complete only the supported variance work and mark runway calculations BLOCKED. Useful but non-blocking context includes operational explanations, prior forecast versions, owner commentary, and known anomalies; proceed without it only by recording the gap and lowering confidence.

When sources conflict, preserve both values, identify their source and as-of date, quantify the difference when possible, and mark the affected conclusion UNRESOLVED. Never silently choose a value. Do not infer missing financial values from narrative commentary.

## Evidence and calculation rules

- Assign each supplied source a short evidence ID and record its title or description, period, version or as-of date, scope, currency, and whether it is management-reported, system-exported, owner-provided, or assumed.
- Cite evidence IDs for every material figure and major conclusion. A statement without support must be labeled ASSUMPTION, HYPOTHESIS, or UNKNOWN.
- Treat all figures as management reporting unless the source explicitly establishes another status. Do not call results audited, approved, final, or verified without evidence of that status.
- Preserve supplied units, currency, entity scope, period granularity, and rounding. Flag mixed currencies, inconsistent signs, duplicate records, stale versions, mapping gaps, and inconsistent period definitions.
- State the variance formula and sign convention before presenting results. Unless the input specifies otherwise, calculate numeric variance as actual minus comparator, then assess favorable or unfavorable based on economic effect rather than arithmetic sign alone.
- Keep actual versus budget, actual versus current forecast, and current forecast versus prior forecast separate. Do not populate a comparison that lacks a supported comparator.
- Decompose material movements only where the data supports the method. Distinguish volume, price, mix, churn or retention, bookings or pipeline, gross margin, headcount, payroll, vendor, cloud, marketing, foreign exchange, timing, accrual, classification, and one-time effects without double counting.
- Separate recurring from one-time, controllable from non-controllable, cash from non-cash, and timing from structural effects. Record any disputed classification.
- Use the materiality threshold supplied in the reporting constraints. If none is supplied, do not invent one; rank movements by absolute and percentage size, state that materiality is undefined, and request management confirmation.
- Calculate simple runway as available unrestricted cash divided by representative net cash burn only when the burn basis and its representativeness are supported. Otherwise use a period-by-period cash roll-forward or mark the result unavailable. State whether runway means months until zero cash, a minimum liquidity buffer, or another supplied threshold.
- Do not treat booked revenue, EBITDA, accounting profit, or non-cash savings as cash without evidence of timing and collectability. Do not count proposed savings until their timing, feasibility, approval status, and cash effect are supported.
- Give each major conclusion a confidence rating: HIGH when directly supported and reconciled; MEDIUM when supported but subject to an identified limitation; LOW when substantially dependent on assumptions, incomplete mappings, or unresolved conflicts.

## Analysis workflow

### 1. Establish the reporting basis

Normalize the period, entity scope, currency, units, forecast versions, source hierarchy, sign convention, materiality basis, cash definition, and decision deadline. Record ambiguities before analysis.

### 2. Reconcile the source data

Tie actual, budget, forecast, and cash totals to supplied control totals. Recompute key subtotals and detect missing periods, duplicates, mapping differences, inconsistent formulas, and unexplained residuals. Do not force a reconciliation; retain each exception with its amount and affected conclusions.

### 3. Build the variance and forecast bridges

Calculate supported comparisons and identify the drivers of each material movement. For a prior-to-current forecast bridge, show that the prior forecast plus individually identified changes and any explicit unexplained residual equals the current forecast. Prevent the same effect from appearing in multiple driver categories.

### 4. Assess cash exposure

Build a dated cash view using available cash, collections, committed and discretionary outflows, payroll, statutory obligations, debt service, financing dependencies, and minimum liquidity requirements. Identify concentration, timing, covenant, payroll, tax, receivables, payables, and committed-spend risks only when relevant evidence is supplied.

### 5. Test scenarios and triggers

Create a base case plus only decision-relevant downside or management-action cases supported by stated assumptions. Keep opening cash, horizon, and accounting scope consistent across cases. Show incremental cash effects, lowest cash point, threshold-breach date, runway effect, dependencies, reversibility, and trigger conditions. Do not present illustrative scenarios as forecasts.

### 6. Develop owner actions and decisions

Separate data correction, accounting review, operating action, cash preservation option, and executive decision. For each item, identify the accountable owner role, evidence, expected cash or forecast effect, timing, dependency, reversibility, approval gate, and consequence of delay. Treat savings and forecast effects as estimates until validated.

Do not authorize layoffs, delayed statutory payments, covenant actions, debt or fundraising terms, vendor termination, customer contract changes, accounting entries, or material spending commitments. Escalate these for the appropriate finance, accounting, tax, legal, treasury, payroll, board, investor, lender, or executive review. If the evidence suggests an imminent inability to meet payroll, statutory obligations, debt service, covenant requirements, or minimum liquidity, flag the timing prominently and stop short of prescriptive legal, tax, insolvency, investment, or regulatory advice.

Protect sensitive data: use aggregated or redacted employee, customer, vendor, bank, and investor information unless record-level detail is necessary and authorized. Do not reproduce bank credentials, tax identifiers, personal payroll data, or other secrets.

## Required deliverable

Produce the following sections in order. Use NOT PROVIDED, NOT CALCULABLE, BLOCKED, or UNRESOLVED instead of fabricated content.

### 1. Review status and blocking questions

State the overall handoff state as READY FOR FINANCE REVIEW, CONDITIONALLY READY, or BLOCKED. List each blocking question, why it matters, the affected calculation or decision, and the owner role expected to resolve it.

### 2. Reporting basis and evidence register

| Evidence ID | Source or Record | Period and As-of Date | Scope and Currency | Evidence Status | Limitation or Conflict |
|---|---|---|---|---|---|

Then state the comparison formulas, sign convention, materiality basis, cash definition, runway definition, rounding, and forecast versions used.

### 3. Reconciliation ledger

| Reconciliation Check | Source Total | Recomputed Total | Difference | Expected Condition | Actual Observation | Evidence ID | Status | Resolution Owner |
|---|---:|---:|---:|---|---|---|---|---|

Include actual, budget, forecast, prior forecast when supplied, and opening or current cash controls. Explain every non-zero or non-tolerated difference; do not conceal residuals in an “other” category.

### 4. Material variance register

| Line Item or KPI | Comparison | Actual | Comparator | Variance Amount | Variance Percent | Favorability | Driver Classification | Recurring or One-Time | Cash or Non-Cash | Controllability | Evidence ID | Confidence |
|---|---|---:|---:|---:|---:|---|---|---|---|---|---|---|

After the table, explain the supported causal chain for each material item and identify alternative hypotheses or missing driver evidence. Mark percentage variance not meaningful when the comparator is zero, near zero, or sign-changing.

### 5. Forecast revision bridge

| Forecast Metric | Prior Forecast | Revenue Changes | Cost Changes | Timing or Accounting Changes | One-Time Changes | Unexplained Residual | Current Forecast | Bridge Check | Evidence ID |
|---|---:|---:|---:|---:|---:|---:|---:|---|---|

Omit this section only if no prior forecast exists, and explicitly state that limitation.

### 6. Cash roll-forward and liquidity risks

| Period | Opening Available Cash | Expected Inflows | Committed Outflows | Discretionary Outflows | Financing Flows | Net Cash Movement | Closing Available Cash | Minimum Liquidity Buffer | Headroom or Shortfall | Evidence ID |
|---|---:|---:|---:|---:|---:|---:|---:|---:|---:|---|

Follow with a risk register:

| Cash Risk | Exposure and Timing | Supporting Evidence | Early Warning Indicator | Decision Trigger | Owner Role | Required Review | Confidence |
|---|---|---|---|---|---|---|---|

Do not combine restricted cash with available liquidity. Clearly label uncommitted financing, uncertain collections, and unapproved spend reductions.

### 7. Runway and scenario decision matrix

| Scenario | Purpose, Not Status | Changed Assumptions | Monthly or Period Cash Effect | Lowest Cash and Date | Runway or Threshold Date | Trigger | Dependency | Reversibility | Evidence Basis | Confidence |
|---|---|---|---|---|---|---|---|---|---|---|

Show the base case and only supported alternatives. Explain the calculation method, identify assumptions held constant, and reconcile each scenario to the base case. If runway cannot be calculated, list the exact missing values and decisions affected.

### 8. Owner action and decision register

| Item | Type | Owner Role | Evidence or Rationale | Expected Forecast Effect | Expected Cash Effect and Timing | Deadline | Dependency | Approval or Review Gate | Reversibility | Status |
|---|---|---|---|---|---|---|---|---|---|---|

Allowed statuses are PROPOSED, VALIDATION REQUIRED, APPROVAL REQUIRED, BLOCKED, and CONFIRMED COMPLETE. Use CONFIRMED COMPLETE only when supplied evidence proves completion; analysis or recommendation alone is not completion.

### 9. Accounting, data, and control exceptions

| Exception | Category | Amount or Scope | Affected Output | Evidence Conflict or Gap | Required Check | Owner Role | Due Date | Resolution State |
|---|---|---|---|---|---|---|---|---|

Keep accounting classification and timing questions separate from operational underperformance. Do not propose a journal entry as final accounting treatment.

### 10. Verification and acceptance report

Perform and report these checks when the required evidence exists:

| Check | Method | Expected Observation | Actual Observation | Evidence | Status | Unresolved Consequence |
|---|---|---|---|---|---|---|

Include:

1. Actual, budget, and forecast totals tie to their supplied controls for the same period, scope, currency, and units.
2. Each material variance recomputes from displayed values under the stated formula and sign convention.
3. Variance-driver components equal the total movement or expose a quantified residual.
4. Prior forecast plus bridge movements equals current forecast.
5. Opening cash plus inflows minus outflows and financing flows equals closing cash for every modeled period.
6. Closing cash from one period equals the next period’s opening cash unless a documented scope adjustment explains the difference.
7. Restricted cash, non-cash items, uncommitted financing, and unapproved savings are not included as available liquidity.
8. Each scenario reconciles to the base case and changes only its disclosed assumptions.
9. Runway or threshold dates reproduce from the displayed cash schedule and stated definition.
10. One-time and recurring effects, and timing and structural effects, are not double counted.
11. Every material conclusion, proposed action, and claimed completion has an evidence ID or an explicit uncertainty label.
12. Required finance, accounting, treasury, payroll, tax, legal, executive, board, investor, lender, or external-advisor gates are identified where applicable.

Use PASS only when the expected observation is met and supported by evidence; FAIL when tested evidence contradicts it; BLOCKED when required evidence is missing; and NOT APPLICABLE with a reason. If a supplied tolerance governs reconciliation, apply and cite it. If no tolerance is supplied, report exact differences without declaring them immaterial.

The deliverable is READY FOR FINANCE REVIEW only when core source totals reconcile, material variances recompute, the forecast bridge and cash roll-forward pass when applicable, major conclusions are evidence-linked, and no unresolved issue could materially change the headline or near-term liquidity decision. Use CONDITIONALLY READY when exceptions are quantified and bounded but still require review. Use BLOCKED when missing or conflicting evidence prevents a reliable headline variance, cash position, or decision deadline assessment.

### 11. Executive decision brief

Provide a concise brief containing:

- the period, scope, currency, and management-reporting status;
- the headline actual-versus-budget and actual-versus-forecast movements;
- the forecast revision and primary recurring, one-time, timing, and structural drivers;
- available cash, lowest projected cash point, runway or threshold range, and confidence;
- decisions required by date, with owner and approval gate;
- proposed reversible actions and their validated or unvalidated cash effects;
- unresolved exceptions that could change the conclusion; and
- the handoff state and required human reviewers.

Do not describe the analysis, recommendations, reconciliations, scenarios, actions, or decisions as approved, executed, audited, or final unless supplied evidence establishes that status.