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Show that a cost reclass moves gross margin but not operating income

  • For FP&A and financial analysts
  • You practice Catching mistakes and made-up facts
  • Time about 5 minutes
  • Level Intermediate

About this exercise

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.

Common mistakes when you ask AI for this

  • Calling it an improvement. The AI says margin improved by 6 points as a win. Try: Add: "Do not say the reclass improves performance."
  • Forgetting the opex increase. The AI moves the $60 out of COGS only and shows income up by 60. Try: Say: "Operating expenses become 410 after the reclass."
  • Wrong margin math. The AI divides COGS by revenue. Try: Add: "Gross margin = (revenue - COGS) / revenue."
  • Markdown extras. The AI adds bold labels, headings and a closing note. Try: Say: "Plain text, no bold. Output only the lines asked for."
  • Trusting the AI to count words. AI is bad at counting and runs past word limits. Try: Ask for fewer words than the real cap and keep each line short.

What a strong prompt includes

  • Names the five lines
  • Gives the new amounts
  • Shows income unchanged
  • Bans the performance claim
  • Caps length

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