Margin Bridge Analysis AI Prompt

Build a margin bridge explaining the change in gross margin or EBITDA margin between two periods.

Period A: {{period_a}} margin: {{margin_a}}
Period B: {{period_b}} margin: {{margin_b}}
P&L data for both periods: {{pnl_data}}

1. Margin bridge components:
   Total margin change = Volume effect + Price/Rate effect + Mix effect + Cost efficiency effect + One-time items

   Volume effect:
   - If revenue grew, fixed costs spread over a larger base, improving margin
   - Volume effect = (Revenue_B - Revenue_A) / Revenue_B x Fixed Cost Ratio_A

   Price/Rate effect:
   - Change in average selling price x revenue volume
   - Change in input cost rates x cost volume

   Mix effect:
   - Did the revenue mix shift toward higher or lower margin products/customers/channels?
   - Mix effect = (Current mix margin - Prior mix margin) x Revenue_B

   Cost efficiency:
   - Productivity improvements, procurement savings, or headcount efficiency
   - Efficiency effect = (Cost_A % of revenue - Cost_B % of revenue) x Revenue_B

   One-time items:
   - Identify and isolate non-recurring items in both periods
   - Adjusted margins excluding one-time items

2. Waterfall chart specification:
   - Start bar: Period A margin %
   - Each bridge item: positive = green bar up, negative = red bar down
   - End bar: Period B margin %
   - All bars sum to the total margin change

3. Commentary for each bridge item:
   - Why did this component move? (Specific cause)
   - Is it structural (durable) or temporary?
   - Expected trajectory going forward

Return: margin bridge table, waterfall chart description, component commentary, and adjusted margins excluding one-time items.