{"id":"fpa-mrr-waterfall-retention","audience":"fpa","category":"finance-work","track":"finance","technique":"constraints","level":"intermediate","title":"Build an MRR waterfall with gross and net retention","free":false,"task":"You're preparing the October recurring revenue waterfall. Write a prompt for plain text with lines starting \"New:\", \"Ending MRR:\", \"Gross retention:\" and \"Net retention:\", each with the math. Reactivated customers count as New. Retention percentages use the starting MRR and exclude New. Round to one decimal. No commentary. Under 80 words. No bullets or numbering. Do not mention the sales manager or total MRR growth percentages.","materialLabel":"October MRR movements (attached to your prompt automatically)","material":"MRR WATERFALL INPUTS - October 2026, Brightpath Learning\n\nStarting MRR (Oct 1): $200,000\nNew logos: +$16,500\nReactivated customers (customers who left earlier and came back): +$1,500\nExpansion (upgrades and added seats): +$7,000\nContraction (downgrades): -$3,000\nChurn (cancellations): -$9,000\n\nDefinitions:\n- Ending MRR = starting MRR + New + Expansion - Contraction - Churn\n- Gross retention = (starting MRR - Contraction - Churn) / starting MRR\n- Net retention = (starting MRR + Expansion - Contraction - Churn) / starting MRR\n- Per policy, reactivations are counted as New.\n\nA sales manager says: \"We grew MRR 6.5%, so retention must be fine.\" Retention here is measured only on the starting customer base.","rules":[{"type":"plainText"},{"type":"maxWords","max":80},{"type":"maxBullets","max":0}],"promptHints":[{"label":"Names the four lines","patterns":["new:","ending mrr","gross retention","net retention"]},{"label":"Includes reactivations in New","patterns":["reactivat"]},{"label":"Excludes New from retention","patterns":["exclude","starting mrr"]},{"label":"Asks for arithmetic","patterns":["arithmetic","math"]},{"label":"Caps length","patterns":["\\d+\\s*words","plain"]}],"mistakes":[{"title":"Leaving out reactivations","why":"The AI counts only new logos as New.","fix":"Say: \"New = new logos + reactivated customers.\"","checks":["r0"]},{"title":"Counting New in retention","why":"The AI includes new MRR in net retention and gets 106.5%.","fix":"Add: \"Retention uses starting MRR and excludes New.\"","checks":["r2"]},{"title":"Mixing gross and net","why":"The AI forgets that gross retention ignores expansion.","fix":"Say: \"Use the definitions given for gross and net.\"","checks":["r1"]},{"title":"Markdown extras","why":"The AI adds bold labels, headings and a closing note.","fix":"Say: \"Plain text, no bold. Output only the lines asked for.\"","checks":["plainText","maxBullets"]},{"title":"Trusting the AI to count words","why":"AI is bad at counting and runs past word limits.","fix":"Ask for fewer words than the real cap and keep each line short.","checks":["maxWords"]}],"hint":"Retention formulas are easy to blend. Give the definitions, the treatment of reactivations and the line labels.","rubricLabels":["New line shows $16,500 + $1,500 = $18,000 and Ending MRR line shows $200,000 + $18,000 + $7,000 - $3,000 - $9,000 = $213,000","Gross retention line shows ($200,000 - $3,000 - $9,000) / $200,000 = 94.0%","Net retention line shows ($200,000 + $7,000 - $3,000 - $9,000) / $200,000 = 97.5%, with New excluded, and the output never mentions the sales manager or an MRR growth percentage"]}