Variance Analysis Template
Originally published: 02/11/2016 18:00
Last version published: 03/01/2017 09:59
Publication number: ELQ-69937-2
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Variance Analysis Template

This is an Excel model template for Master Revenue Variance Analysis (Volume, Mix, Price, Fx Rate).

The use of budgets is one of the main ways in which firms plan and control their behaviour. Firms set targets, and then periodically compare how their actual figures compare. Looking at deviations between current and previous periods helps firms with performance analysis. It may be clear when sales are higher or lower than expected, however, reasons behind such deviations may not be as obvious (expect in the case where a deep dive analysis has already been performed). Explaining these sources of deviation is important for firms.

To do this, firms often use variance analysis which is used to investigate the difference between actual and planned behaviour. By comparing a specified period (such as the current month, the current year, the last estimation, and so on) with a base period, one can analyse deviations and begin to explore the reasons behind them.

This variance analysis model is intended to help understand the real causes of variances in your firm. By doing so, you can easily track performance and decide how to focus your time! The accompanying article provides further clarity and explanation of variance analysis.

- Umit Coskun, 2016

This Best Practice includes
1 Excel Model, 1 PDF Article

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