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Variance Formula Template

Variance Formula Template

This variance formula template helps you find out the variance between actual and forecast financial figures.

This is what the variance formula template looks like:

Variance Formula Template Screenshot

 

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Variance Formula Template

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The variance formula is used to calculate the difference between a forecast and the actual result. The variance can be expressed as a percentage or an integer (dollar value or the number of units).  Variance analysis and the variance formula play an import role in corporate financial planning and analysis (FP&A) to help evaluate results and make informed decisions for the business going forward.

There are two formulas to calculate variance:

Variance % = Actual / Forecast – 1  or  Variance $ = Actual – Forecast

 

Variance in budgeting and forecasting

The variance formula is useful in budgeting and forecasting when analyzing results.  The job of a financial analyst is to measure results, compare them to the budget/forecast, and explain what caused any difference.

In the Financial Planning & Analysis department at a company, the role of FP&A is to present management with accurate, timely, and insightful information so they can make effective decisions about the business going forward.

 

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