{"id":"fpa-reclass-margin-vs-income-lines","audience":"fpa","category":"finance-work","track":"finance","technique":"verification","level":"intermediate","title":"Show that a cost reclass moves gross margin but not operating income","free":false,"task":"You're explaining a reclassification to the CFO. Write a prompt for plain text with lines starting \"Gross margin before:\", \"Gross margin after:\", \"Operating income before:\", \"Operating income after:\" and \"Change in operating income:\", each with the math. Don't say the reclass improves performance. Under 80 words. No bullets or numbering. Never use the words improvement, improved, better or worse.","materialLabel":"Reclass details and P&L (attached to your prompt automatically)","material":"RECLASS IMPACT - Q3 2026, Fieldstone Software ($ thousands)\n\nRevenue: 1,000\nCost of revenue (COGS): 400\nOperating expenses (below gross profit): 350\n\nReclass: $60 of customer support salaries will move from COGS to operating expenses starting this quarter, to match the new policy for support staff. Nothing else changes.\n\nMethod: gross margin = (revenue - COGS) / revenue. Operating income = revenue - COGS - operating expenses.\n\nNotes: the CEO was pleased that gross margin 'went up' and asked to mention it in the board letter as a performance improvement. The reclass changes where cost is reported, not what was spent.","rules":[{"type":"plainText"},{"type":"maxWords","max":80},{"type":"maxBullets","max":0}],"promptHints":[{"label":"Names the five lines","patterns":["gross margin before","gross margin after","operating income before","operating income after","change in operating income"]},{"label":"Gives the new amounts","patterns":["340","410"]},{"label":"Shows income unchanged","patterns":["change in operating income"]},{"label":"Bans the performance claim","patterns":["(do not|don'?t).*(improve|performance|ceo)"]},{"label":"Caps length","patterns":["\\d+\\s*words","plain"]}],"mistakes":[{"title":"Calling it an improvement","why":"The AI says margin improved by 6 points as a win.","fix":"Add: \"Do not say the reclass improves performance.\"","checks":["r2"]},{"title":"Forgetting the opex increase","why":"The AI moves the $60 out of COGS only and shows income up by 60.","fix":"Say: \"Operating expenses become 410 after the reclass.\"","checks":["r1","r2"]},{"title":"Wrong margin math","why":"The AI divides COGS by revenue.","fix":"Add: \"Gross margin = (revenue - COGS) / revenue.\"","checks":["r0"]},{"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":"A reclass moves cost between lines. Give both new amounts, the formulas and a ban on calling it a win.","rubricLabels":["The line starting \"Gross margin before:\" shows (1,000 - 400) / 1,000 = 60.0% and the line starting \"Gross margin after:\" shows (1,000 - 340) / 1,000 = 66.0%","The lines starting \"Operating income before:\" and \"after:\" show 1,000 - 400 - 350 = 250 and 1,000 - 340 - 410 = 250","The line starting \"Change in operating income:\" shows 250 - 250 = 0, and the output never says the reclass improved performance, and never uses the words improvement, improved, better or worse"]}