Written Communication to a Department Leader for Financial Analysis

WRITTEN COMMUNICATION TO A DEPARTMENT LEADER

You will be provided a financial report with budget, forecast and actual information. You will be asked to utilize your written communication and analytical skills to respond to an email request from a department leader on how they are performing financially compared to their budget and forecast.

Materials provided for review: Financial report

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Objectives:

Given financial results data, be able to:

• Create written correspondence to respond to the department leader’s request.
• Communicate in writing in a clear and professional manner using proper spelling, grammar, and sentence structure.
• Utilize the financial report to identify noteworthy items to address in the email. Since the context and driver are unknown, prepare the email based on just the financial data presented.

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Hi Department Leader,

Hope you are doing well.

This is in regards to the April 2019 financials and how we are performing financially FY 2019.

Quick Summary:

Overall, we are looking good YTD with 103.58% achievement of our YTD revenue forecast and also showing 0.51% positive of our YTD budgeted revenue. From revenue perspective, we are running very close to our monthly (-0.43%) and YTD budget (+0.51%) – not a major delta to worry about.

However, the April 2019 did not do as much what we expected and we missed our numbers by (-1.06%) or 78k to be very precise as compared to our forecast. It looks like the revenue was impacted by either consumption patterns or price fluctuations. Overall, number of customers up by 1.17% and usage up by 10.78%

The expenses also came in positive and the big influencer was the Outside services (came in 50% fcst) – as we are making huge efforts to cut the external costs significantly, it is reflecting in our numbers as well.

Here are the financial data points for your reference:

• Total revenue went down for April by 1.06% in comparison to Forecast primarily due to revenue for Commercial customers which went down by (-2.26%), however Residential & Industrial went up by 0.04% and 2.16% respectively.

• The overall YTD revenue looks positive and we are up by 3.58% in comparison to the forecast - however, the Residential YTD revenue looks low but we should be able to cover the gap in winter as we usually expect higher consumption due to weather and snowbirds.

• The total April Operating expenses down by 12.48% in comparison to the forecast which is helping to bridge the delta for YTD Annual Operating Income as compared to the YTD forecast. April YTD expense figures also came in (-17.66%) of the forecast which is a good sign, again, the impact is because of Outside Services (-46.01%) and Labor cost (-17.54%) which came in much lesser than we expected.

• Strategic sourcing - Effective cost reduction techniques gives a competitive advantage which is reflecting in the overall Operating expenses especially Outside services (third party contractor cost) came in half as compared to the forecast except Materials and Other expense which went up by 6.6% and 1.19% respectively. It will also help in researching all the major cost components of purchases, and then we can make more informed purchasing decisions.

• Labor cost also down by 10.41% for April and 17.5% YTD - which is a big influencer in cost reduction. Job cut $$ are now reflecting in the numbers.  

Having said that, we need to work on improving the expense forecast efficiency next month – and need to communicate this message strongly to the business teams so that going forward we can forecast our expenses more accurately.

Please let me know if you need more details or if we should get on a call to discuss.