36.5 Finance and Accounting
Finance interviews in Pune firms ask variance, not "how many vouchers did you pass". The sign must be written on the page. Here a positive variance means under budget (budget minus actual), the same rule as Module 35.5.
| KPI | What the number means | Who uses it | Action it drives |
|---|---|---|---|
| Variance | Budget minus actual, in ₹. | Accountant, city finance lead | Over budget (negative) needs a name and an account. Under budget is not automatically good. |
| Variance % | Variance divided by budget. | Finance manager | Compare accounts. A company total can hide one account that is over. |
| Gross margin % | (Sales minus cost) divided by sales. Not in the table below; ask for both columns before you compute it. | Commercial finance | A margin drop with flat sales is cost, not "demand". |
Fictional sample rows. One month. No sales column here, so we do not invent a margin.
| City | Account | Budget | Actual |
|---|---|---|---|
| Pune | Rent | ₹10,000 | ₹8,000 |
| Pune | Wages | ₹20,000 | ₹24,000 |
| Nashik | Rent | ₹8,000 | ₹8,000 |
| Nashik | Wages | ₹16,000 | ₹12,000 |
| Kolhapur | Delivery | ₹6,000 | ₹9,000 |
| Nagpur | Wages | ₹20,000 | ₹16,000 |
Worked from those rows.
- Budget is ₹80,000. Actual is ₹77,000.
- Variance is budget minus actual. 80,000 − 77,000 = ₹3,000 under budget.
- Variance % is that variance divided by budget. 3,000 ÷ 80,000 = 3.75%, which is 3.8% to one decimal place.
Pune alone is budget ₹30,000 and actual ₹32,000. Variance is 30,000 − 32,000 = −₹2,000 (over budget). Rent is ₹2,000 under. Wages are ₹4,000 over. They cancel in the city total and still need two actions. Nashik wages are ₹4,000 under (16,000 − 12,000).
| Good KPI | Vanity metric | |
|---|---|---|
| From the same rows | Pune wages ₹4,000 over budget | Company variance ₹3,000 under (3.8%) |
| Why | The wage line is the decision. | The company card looks healthy because Nashik and Nagpur underspent. A CFO who stops at 3.8% will miss Pune wages. |
What the manager does. The Pune finance lead asks who approved the extra ₹4,000 of wages, and does not "explain" it with the cheap rent. The Nashik lead asks whether the ₹4,000 wage gap is a vacant seat. Underspend on wages with the same delivery promise is not a saving until someone checks the roster.
Ravindra Bagale's Tip
Friends, many students label actual divided by budget as variance %. 24,000 ÷ 20,000 = 120% is spend, not variance. Variance is the difference; then divide that by budget. Got it?
Ravindra Bagale's Tip – मराठी
मित्रांनो, बरेच students actual भागिले budget ला variance % असं label करतात. 24,000 ÷ 20,000 = 120% म्हणजे spend, variance नाही. Variance म्हणजे फरक, मग त्याला budget ने भागा. समजलं का?
Ravindra Bagale's Tip – हिंदी
दोस्तों, बहुत से students actual भाग budget को variance % label कर देते हैं. 24,000 ÷ 20,000 = 120% spend है, variance नहीं. Variance यानी फ़र्क, फिर उसे budget से भाग दो. समझ आया?