Overview

Draft Management’s Discussion and Analysis for 10-K or 10-Q with a driver-based structure: results of operations, liquidity and capital resources, known trends and uncertainties, and critical accounting estimates. The skill guides you through a drivers-first outline, prompts for causation and sustainability (one-time vs recurring), ensures liquidity covers debt maturities and covenants where relevant, and translates known trends into investor-safe plain English. Includes a validation tool for required Item 303 subsections, conclusory language, and non-GAAP reconciliation.

Example Conversation

You: We need to draft the MD&A for our Q2 10-Q. I have our segment highlights and a cash flow bridge in the workspace. Revenue was up 8% year over year, mostly volume in North America; we had a one-time legal settlement that hit operating income. We also closed the new revolver in May — can you work that into liquidity?

Agent: I’ll build a driver-based MD&A for the interim period. I’ve loaded the Item 303 reference and the driver outline. For Results of Operations I’ll call out: (1) revenue +8% YoY driven by North America volume, (2) operating income impact from the one-time legal settlement, and (3) any other material line items you want highlighted. For Liquidity I’ll include sources/uses and the new revolver — maturity, covenant summary, and headroom if you have it. I’ll add a short Known Trends and Uncertainties section and cross-check against your Risk Factors. Then I’ll run the validator.

You: Go ahead. We have about $200M drawn on the $400M revolver; maturity June 2030. No covenant issues.

Agent: I’ve created output/mda-10q-q2.md with a drivers table and narrative for Results of Operations, Liquidity and Capital Resources (including the new revolver and the $200M draw), and Known Trends and Uncertainties. Running the validator now.

Agent: Running validate_mda on output/mda-10q-q2.md…

0 errors | 0 warnings | 3 info

Required Item 303 subsections (results of operations, liquidity and capital resources, trends/uncertainties) appear present. Non-GAAP measures accompanied by reconciliation language. Liquidity section discusses debt. Ready for counsel review.

Sample Output Excerpt

Below is a representative excerpt from an MD&A draft: a drivers summary table and a portion of the Results of Operations narrative.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations

Overview

Revenue for the quarter increased 8% year over year, primarily due to higher volume in North America and favorable product mix. Operating income decreased 12%, largely reflecting a one-time legal settlement charge of $4.2 million; excluding that item, operating margin was in line with the prior year. Net income was $18.1 million compared to $20.5 million in the prior year period.

Drivers summary

Revenue

Revenue increased 8% to $142 million from $131 million in the prior year quarter. The increase was driven primarily by higher unit volume in North America, which benefited from stronger demand in our industrial and aftermarket channels, and by a more favorable product mix. International revenue increased 2% on a reported basis; on a constant-currency basis, international revenue increased 5%, with flat volume and modest price realization. We expect volume trends in North America to continue for the remainder of the fiscal year, subject to normal seasonality.

Extension Tools

The skill includes one extension tool that validates a drafted MD&A section for Reg S-K Item 303 compliance.

validate_mda scans the draft and reports errors, warnings, and informational findings in five areas:

Required subsections (Item 303) — Ensures the document has the three expected subsections: (1) Results of operations — headings such as “Results of Operations” or “Operations Results”; (2) Liquidity and capital resources — “Liquidity and Capital Resources,” “Liquidity and Capital,” or “Capital Resources”; (3) Known trends and uncertainties (or Critical accounting estimates) — “Known Trends and Uncertainties,” “Trends and Uncertainties,” or “Critical Accounting Estimates.” Missing results or liquidity triggers an error; missing trends/uncertainties triggers a warning to consider adding that discussion.

Conclusory or vague language — Flags phrasing that Item 303 discourages because it does not explain causation. Detected patterns include: “increase due to various factors,” “decrease due to various factors,” “due to a number of factors,” “attributable to various factors,” “resulted from various factors,” “driven by various factors,” and “several factors contributed/led/drove.” Each occurrence is reported as a warning with a suggestion to identify specific drivers (e.g. volume, price, one-time items).

Quantitative change and drivers — For paragraphs that mention percentage or dollar changes (e.g. “8% increase,” “decrease of $2.4 million”) but lack clear driver language (e.g. “due to,” “driven by,” “volume,” “price,” “one-time,” “acquisition”), the tool reports a warning. The goal is to ensure each material quantitative change has an accompanying qualitative driver.

Liquidity and debt/covenants — If the document mentions debt, credit facilities, or covenants, the tool checks whether the liquidity section discusses debt maturities or refinancing needs and, where relevant, covenant headroom or compliance. Omissions trigger a warning or an informational prompt to add that discussion where material.

Non-GAAP measures — If the document references non-GAAP or adjusted measures (e.g. “adjusted EBITDA,” “non-GAAP revenue,” “free cash flow excluding …”), the tool checks for reconciliation or cautionary language (e.g. “reconciliation to GAAP,” “see … reconcile”). Non-GAAP mention without such language triggers a warning to add or cross-reference a reconciliation and appropriate caution.

The validator outputs a short report (errors, warnings, info) that the agent can use to revise the draft before finalization.

Getting Started

Add your source materials (financial highlights, segment KPIs, cash flow bridge, debt maturity summary, known risks/trends list, and any non-GAAP definitions) to the project workspace, then activate the MD&A — Driver-Based Drafting (Item 303) skill. The agent will guide you through period and segment selection, a drivers-first outline, drafting with causation for each material change, liquidity and known trends, a consistency cross-check with Risk Factors and 8-K events, and validation.