---
title: "AI for Financial Analysis"
metaTitle: "AI for Financial Analysis"
description: "AI for finance teams: how AI drafts the explanation, a spreadsheet calculates, and a person checks every number. Worked example using Apple 10-K data."
date: 2026-10-04
updated: 2026-10-05
tags: [ai-training, finance]
cover: cover.webp
coverAlt: "A young woman in a mustard cardigan stands at the till of a shop, ticking a list on a clipboard with a pen; three items are already ticked. A stack of sheets lies beside the cash register, with blurred shelves of goods behind."
draft: false
sources: [https://www.sec.gov/Archives/edgar/data/320193/000032019325000079/aapl-20250927.htm, https://d18rn0p25nwr6d.cloudfront.net/CIK-0000320193/c636d8a7-8025-47d2-9b13-bcf5465343b3.html]
---

AI for finance teams is most useful in one place: drafting explanations for already-verified numbers. Team training builds around one outcome - a manager memo where every figure traces back to a named source. A spreadsheet calculates; AI assembles a draft; a person checks. The method is demonstrated on Apple Inc. Form 10-K FY2025.

## AI for Finance Teams: Three Roles in Preparing a Report Memo

Three roles work together in memo preparation: an employee extracts numbers and writes the AI task, a spreadsheet calculates, and AI prepares a draft explanation. The manager asks the business question and accepts the final document with its sources.

Here is what each role does.

- **Employee** extracts numbers from the report, notes the page and year, and verifies that totals reconcile. The employee also writes the task for AI - for example: "Take revenue and cost of sales from the Consolidated Statements of Operations, page 29, and calculate gross profit for two years." Gross profit is revenue minus cost of sales; it shows what remains after the costs of goods sold and services delivered.
- **Spreadsheet** calculates. Excel or a script gives exact numbers. AI is not needed at this step.
- **AI** prepares a draft explanation: it finds the relevant section of MD&A (MD&A is the Management Discussion and Analysis section in an annual report where the company explains changes in its own words), gathers what management writes about causes, and formats text for the memo. It can also suggest which footnote to reread if a number looks odd.
- **Manager** asks the business question and accepts the final meaning. The manager reads a memo with sources, not raw model output.

After the session, the team has a clear procedure: what gets calculated, what gets explained, who checks. One demonstration on a real report does not guarantee that people will stop confusing a dollar amount with a percentage - but it becomes a verifiable skill, not just theory.

## What Apple 10-K Data Shows from the Consolidated Statement

The consolidated statements of operations show revenue, cost of sales, gross profit, operating expenses, and operating income - with two years of data in one table.

A 10-K is an annual report that US public companies file with the SEC (Securities and Exchange Commission); it is publicly available on the regulator's website. Source: [Apple Inc. Form 10-K FY2025](https://www.sec.gov/Archives/edgar/data/320193/000032019325000079/aapl-20250927.htm). The fiscal year (FY - Financial Year) ended September 27, 2025; the prior year ended September 28, 2024. Both contain 52 weeks. Data is taken from the Consolidated Statements of Operations (Part II Item 8, page 29). All amounts are in millions of US dollars.

| Metric | FY2025 | FY2024 |
|---|---|---|
| Total revenue | 416,161 | 391,035 |
| Total cost of sales | 220,960 | 210,352 |
| Gross profit | 195,201 | 180,683 |
| Operating expenses | 62,151 | 57,467 |
| Operating income | 133,050 | 123,216 |

Operating income is gross profit minus two categories of operating expenses: research and development, and selling, general and administrative. Both categories sum to the single operating expenses line.

Gross profit in dollars grew by 14,518 million. Revenue grew by 25,126 million, or 6.43%. At first glance, that looks good. But the percentage margin is a different number.

**Gross margin** is gross profit as a share of revenue, expressed in percent. FY2025: 195,201 / 416,161 x 100 = 46.9052%. FY2024: 180,683 / 391,035 x 100 = 46.2063%. Change: 0.6988 percentage points (abbreviated pp).

A percentage point is the unit of difference between two percentage values. If margin rose from 46.2 to 46.9, the increase is 0.7 pp, not 0.7 percent. The dollar amount of profit and its share of revenue are different things - confusing them is a common error in memos for management.

The third year, FY2023 (ended September 30, 2023), contains 53 weeks. The year length differs, and direct comparison without noting this is misleading. That is why this example uses two comparable years of 52 weeks each.

![Overhead view of a clear compartment tray, each cell holding a bundle of paper receipts bound with a magenta, cyan or yellow rubber band. A hand lifts one receipt and holds a magnifier over an ink smudge on it. A pencil lies to the right.](/blog/ai-training-finance-team/fig-exercise.webp)

## Why Product Gross Margin Fell in Percentage but Rose in Dollars

Products added 3,254 million in gross profit dollars, but their percentage margin fell from 37.2 to 36.8%. Dollar growth and percentage contribution are different things: the percentage margin shows profit as a share of revenue, not its absolute amount.

Apple splits revenue into two categories: Products and Services. Apple's reporting segments are geographic; Products and Services are categories within a single table that show where revenue comes from.

| Category | Revenue FY2025 | Revenue FY2024 | Gross profit FY2025 | Gross profit FY2024 | Margin FY2025 | Margin FY2024 |
|---|---|---|---|---|---|---|
| Products | 307,003 | 294,866 | 112,887 | 109,633 | 36.8% | 37.2% |
| Services | 109,158 | 96,169 | 82,314 | 71,050 | 75.4% | 73.9% |

The margins above are taken from the MD&A section (Part II Item 7, page 24) - Apple publishes them for readers. Accurate contribution calculations require full, unrounded numbers.

Services added 11,264 million in gross profit, and their margin rose from 73.9 to 75.4%.

What does Apple management write? On Products: the dollar gross profit grew due to favorable costs and product mix, partially offset by tariff costs. The percentage declined due to product mix and tariffs, partially offset by other favorable costs. On Services: the dollar amount grew from sales and mix; the percentage grew from mix, partially offset by increased costs. This is the company's position from MD&A (Part II Item 7, page 24).

The table cannot quantitatively separate the contributions of prices, tariffs, and product mix. In the memo this is labeled as management's explanation, not an established cause.

The total margin percentage is the weighted average of the two category percentages, weighted by their shares of revenue. When the Services share grows, and Services earn a 75% margin compared to 37% for Products, the total percentage is pulled upward by the structure shift. That is what happened in FY2025.

## How to Decompose Margin Change and Format a Memo for the Manager

The main rule: all calculations use full, unrounded numbers. The rounded percentages Apple publishes on page 24 are for readers, not input data for contribution calculations. Using those rounded numbers causes contributions to disagree with the 0.6988 pp total.

1. **Calculate each category's revenue share** for both years. Services FY2025: 109,158 / 416,161 x 100 = 26.2298%. Services FY2024: 96,169 / 391,035 x 100 = 24.5935%. Products take the remainder: 73.7702% and 75.4065% respectively.

2. **Calculate each category's margin** from full numbers for both years: gross profit / revenue x 100. Four numbers, none rounded. Products margin FY2025 = 112,887 / 307,003 x 100 - the exact value for calculation, not the rounded 36.8% from page 24.

3. **Calculate the share-shift contribution.** Take the new revenue shares (FY2025) and the old margins (FY2024). For each category, multiply the share by the margin and divide by 100 (both values are expressed as percentages). Sum the results. The difference from the FY2024 total margin is the share-shift contribution: 0.6005 pp.

4. **Calculate the margin-change contribution.** For each category, multiply its FY2025 share by the margin difference (FY2025 minus FY2024), then divide by 100. For Products: 73.7702 x (Products margin difference) / 100 = -0.3024 pp. The same for Services gives +0.4007 pp.

| Contribution | Magnitude (pp) |
|---|---|
| Revenue share shift toward Services | +0.6005 |
| Products margin change | -0.3024 |
| Services margin change | +0.4007 |
| Total | 0.6988 |

The contributions sum to the total change. This is an arithmetic check: if the sum does not match the direct calculation of 0.6988 pp, there is an error in the spreadsheet.

Reversing the substitution order - margins first, then shares - changes individual contributions but leaves the total unchanged. In the memo, state the order explicitly: 0.6005 pp is the result of a specific method, not a proven strategic effect. A shift in Services' share of total revenue and a change in the mix of Services themselves are different things; in the memo they must be labeled differently.

**An error that is easy to make on first attempt.** Suppose an employee asks AI to explain the growth in overall margin and receives this text: "Products gross profit grew by 3,254 million - so Products explain the overall margin growth." Products' contribution to the percentage metric was -0.3024 pp - they pulled margin down. The larger part of the growth came from the structure shift toward Services (+0.6005 pp). Products' share of revenue fell from 75.4 to 73.8%, and that shrinkage pulls the total percentage upward because Services earn twice the margin.

Corrected wording for the memo: "The overall gross margin growth of 0.6988 pp is explained primarily by the revenue structure shift toward Services (contribution 0.6005 pp) and the increase in Services margin (0.4007 pp), partially offset by the decline in Products margin (-0.3024 pp)."

![A cyan ring binder is open: the left sheet shows a table with grey marks, the right sheet has a yellow column.](/blog/ai-training-finance-team/fig-review.webp)

**Full step-by-step memo preparation process.**

1. **Choose the question and the document.** Example: "Why did Apple's gross margin change by 0.7 pp between FY2024 and FY2025?" Document: the published 10-K on the SEC website. The question is managerial: it requires explaining where the figure came from, not only calculating it.

2. **Work through the sources.** Find the relevant lines and verify that they reconcile: Products revenue plus Services revenue equals total revenue; cost of sales totals match; revenue minus cost of sales equals gross profit; the two categories of operating expenses sum to the total; gross profit minus operating expenses equals operating income. For the Apple breakdown: 33 source numbers and 15 equalities across three years.

3. **Verify calculations independently.** A second team member recalculates margins and changes from their own spreadsheet. If the numbers match, the package moves forward.

4. **Hand off the task to AI.** Below is a copyable task with full verified input data:

"You are preparing a draft memo for the head of the finance department. The manager's question: why did Apple's gross margin rise by 0.7 pp between FY2024 and FY2025, even though Products margin declined.

Verified source data, Apple Inc. Form 10-K FY2025, Part II Item 8, p.29, millions USD, order 2025/2024: total revenue 416,161 / 391,035, total cost of sales 220,960 / 210,352, total gross profit 195,201 / 180,683. Products: revenue 307,003 / 294,866, cost of sales 194,116 / 185,233, gross profit 112,887 / 109,633. Services: revenue 109,158 / 96,169, cost of sales 26,844 / 25,119, gross profit 82,314 / 71,050. Overall margin percentage: 46.9052 / 46.2063, change 0.6988 pp.

Result of our own contribution decomposition (order: shares first, then margins): revenue structure shift toward Services contributed 0.6005 pp, Products margin change: -0.3024 pp, Services margin change: +0.4007 pp.

Management's position from MD&A, Part II Item 7, p.24: on Products, dollar gross profit grew due to favorable costs and product mix, partially offset by tariffs; the percentage declined due to mix and tariffs, partially offset by other favorable costs. On Services, the dollar amount grew from sales and mix; the percentage grew from mix with partial offset from costs.

Response format: four blocks. Observation (what changed in the numbers). Company explanation (what management writes, without your additions). Own calculation (what the contribution decomposition above showed). Unknown (what the data cannot determine). Do not invent causes. Do not add forecasts. If the source has no data for an answer, write 'no data available.'"

5. **Check the conclusions.** The manager reads the memo and decides what goes into it. AI does not sign the final document.

Below is a sample final document after verification, not a live model response.

**Sample memo**

- Question: why did Apple's gross margin rise by 0.7 pp between FY2024 and FY2025, even though Products margin declined?
- Source: Apple Inc. Form 10-K FY2025, Part II Item 8, p.29; Part II Item 7, p.24.
- Metric: gross margin as a percentage of revenue.
- Calculation: overall percentage FY2025: 46.9052%, FY2024: 46.2063%, change: 0.6988 pp. Decomposition (order: shares first, then margins): contribution of Services share shift in revenue: +0.6005 pp, contribution of Products margin change: -0.3024 pp, contribution of Services margin change: +0.4007 pp.
- Company explanation: management attributes the Products margin decline to product mix and tariffs; the Services margin increase to services mix, partially offset by increased costs.
- Conclusion for the manager: the overall margin growth is driven primarily by the revenue structure shift toward Services and the increase in their margin; Products contributed negatively to the percentage metric despite a positive contribution to dollar gross profit. The quantitative contribution of tariffs and prices cannot be determined from the report's tables.
- Verified by: (name, date).

## Common Data Errors and Choosing the Right Tool

The session covers five errors the team will encounter in real reports.

**Swapped years.** If FY2025 and FY2024 are swapped when extracting a number, the arithmetic still works but the margin belongs to the wrong period. Defense: before calculating, reconcile every line with the source by page number and year. Add a verification formula in the spreadsheet: if Products revenue plus Services revenue does not equal total, the cell highlights.

**Incomparable periods.** The same calendar quarter at two different companies may cover different dates. Check the specific start and end dates, the number of days or weeks, and the financial calendar.

A cumulative "nine months" figure covers three quarters. A standalone third quarter is found by subtracting comparable six-month figures from nine-month figures - this works for flow metrics like revenue, which are sums over a period.

For a balance-sheet figure at a point in time - a value fixed at a specific moment - this method does not apply. The cash balance on September 30 is not equal to the difference between balances on December 31 and March 31. Without being told the period, AI will readily carry a date-mixing error into its answer.

**Plausible but unverified explanation.** The model can attribute growth to a specific product if the input contains no breakdown for it. The phrasing sounds convincing, but it is speculation. In the memo, such a conclusion is marked "source data unavailable" and excluded from the final result.

**Amended report.** A company files a 10-K, then a 10-K/A - an amendment - where explanations may change without altering financial figures. Before starting work, find out whether an amendment exists, what was changed, and which periods are affected.

**Units error.** Reports may use thousands, millions, or billions. The difference between thousands and millions is a factor of one thousand. A scale error breaks the entire calculation.

A separate exercise for the session: take the same 10-K and explain the Services margin change using the same decomposition method, but within the Services category itself. Since Apple does not publish Services subcategories in Item 8, the task ends by recording the constraint: "the Services breakdown is not disclosed in the report." This teaches the difference between a task that can be solved and a task where the required data does not exist.

Memo readiness criterion: all template fields are filled, all numbers reconcile with the source, and the "unknown" block honestly shows what cannot be said from available data. If for a specific task there are no unresolved questions, the block may be brief.

The full cycle on a new report - prepare, verify, correct, rebuild - can take longer than the first run on familiar material. The team tests the hypothesis: it records the time for each step, compares two complete processes on comparable tasks, and counts substantive corrections after the first memo version. If there is no time saving, that is a result of the test, not a failure of the employee.

**Excel or a script.** One report per quarter with clear formulas and two or three sheets - Excel covers the task. Cross-sheet links, conditional formatting, manual rebuild after updates: all manageable.

If the same set of sources repeats every month - several reports with the same structure and the same checklist of verifications - a script may reduce fatigue-related errors and simplify rebuilding. This is a hypothesis, testable on the full cycle. There is no guaranteed speedup: the result depends on input data quality and completeness of checks.

Integration into company systems is a separate project. Data updates, access rights, actions in accounting systems are not a classroom session. AI tool training may surface an implementation task, but the integration remains a separate decision.

For a reader with a complex Excel workbook: [how to audit Excel links with AI](/blog/ai-excel-dashboard-audit/). On team training: [AI training for financial tasks](/ai-training/).

## Questions about AI in financial analysis preparation

### Is programming needed to participate in a report analysis session

No. The primary tool is a spreadsheet with formulas and a plain-language task for AI. An employee writes the task in words and checks the draft against the source - no programming required. A script is discussed as a possible next step once the team has mastered the basic process in a spreadsheet and the task repeats often enough to justify it. For the first session, no script is needed: first the procedure is practiced, then its automation is evaluated.

### Can confidential company data be uploaded to AI

It depends on company policy and on the terms of use of the specific AI tool. The session uses only published reports that anyone can download from the SEC website, so no internal company data is involved at any step. Whether the same method can later be applied to internal data is a question for the IT policy and for a legal review. It is not a question about the analysis method itself.

### Can AI make forecasts or do arithmetic instead of the employee

AI can recalculate what it is given, but that does not replace verification. In this method, the spreadsheet or script performs calculations; AI prepares a draft text and finds relevant footnotes in the report. Forecasts are not part of the session: the method works with established facts from a published report and the company's own management commentary. AI's job is to format and structure the explanation, not to generate numbers.

### What does the team know how to do after training on report analysis preparation

Prepare a memo for a manager from a published report - every number with a source reference and page, every explanation labeled as either the company's position or our own calculation, an "unknown" block showing what cannot be said from available data. The team knows where to check data reconciliation and how to write an AI task so AI does not invent causes. This is a verifiable skill, not a guarantee of error-free analysis on every future report.

### How to check that AI has not added nonexistent figures to the draft

The employee checks every figure and conclusion in the draft against the source - the specific page and line in the report, or their own spreadsheet calculation. Before handing off the task to AI, all source data is already verified: AI receives only what the employee has checked. If a number appears in the draft without a source, that is a blocker: the conclusion is not included in the memo.

### How to correctly name a margin change - in dollars or in percentage points

Both must be named, with an explanation of the difference. The dollar change (for example, +3,254 million for Products) shows how much profit the category added in absolute terms. The percentage-point change shows how efficiency changed - profit as a share of revenue. Products can grow dollar profit and at the same time lower their percentage margin: that is exactly what happened at Apple in FY2025. Both figures belong in a manager memo, and each requires its own explanation.

## What Finance Professionals Gain from One Real-Report Breakdown

AI for finance teams works best where its output is checkable: drafting explanations from already-verified numbers, finding relevant sections in a report, helping with phrasing. Arithmetic, source verification, and the final decision stay with the person.

The Apple 10-K breakdown in the session gives the team two results: a clear procedure - what gets calculated, what gets prepared with AI, what gets verified manually - and a specific skill: seeing the difference between dollar growth and percentage contribution, and between the company's position and your own calculation.

*If you want to work through a similar report with your team or clarify the session format, write to us: [Telegram](https://t.me/shimaoz) or [hello@majento.ai](mailto:hello@majento.ai).*