The method
Use this prompt when analyzing financial statements like balance sheets, income statements, and cash flow statements. Provide the AI with the financial statements (or key data points) and ask it to perform specific calculations or analyses. It works best with clear instructions and well-formatted data. Can be used to provide insights for investment decisions.
The prompts
Prompt 1
Analyze the following financial statements for [Company Name] for the years [Year 1] and [Year 2]. Calculate the following ratios: Current Ratio, Debt-to-Equity Ratio, and Profit Margin. Identify any significant trends or areas of concern based on these ratios and the provided financial data. Provide a summary of your findings, highlighting the company's financial strengths and weaknesses. The data is:
**Balance Sheet ([Year 1]):**
Assets: [Data]
Liabilities: [Data]
Equity: [Data]
**Balance Sheet ([Year 2]):**
Assets: [Data]
Liabilities: [Data]
Equity: [Data]
**Income Statement ([Year 1]):**
Revenue: [Data]
Cost of Goods Sold: [Data]
Operating Expenses: [Data]
Net Income: [Data]
**Income Statement ([Year 2]):**
Revenue: [Data]
Cost of Goods Sold: [Data]
Operating Expenses: [Data]
Net Income: [Data]
**Balance Sheet ([Year 1]):**
Assets: [Data]
Liabilities: [Data]
Equity: [Data]
**Balance Sheet ([Year 2]):**
Assets: [Data]
Liabilities: [Data]
Equity: [Data]
**Income Statement ([Year 1]):**
Revenue: [Data]
Cost of Goods Sold: [Data]
Operating Expenses: [Data]
Net Income: [Data]
**Income Statement ([Year 2]):**
Revenue: [Data]
Cost of Goods Sold: [Data]
Operating Expenses: [Data]
Net Income: [Data]
Prompt 2
I am evaluating [Company Name] for a potential investment. Based on the provided financial statements for the last three years ([Year 1], [Year 2], [Year 3]), perform a DuPont analysis to break down the return on equity (ROE) into its component parts (Profit Margin, Asset Turnover, and Equity Multiplier). Assess the company's profitability, efficiency, and leverage, and explain how these factors contribute to the overall ROE. Identify any changes in these components over time and explain the potential reasons for these changes. The data is:
**Financial Statements ([Year 1]):**
[Provide relevant data]
**Financial Statements ([Year 2]):**
[Provide relevant data]
**Financial Statements ([Year 3]):**
[Provide relevant data]
**Financial Statements ([Year 1]):**
[Provide relevant data]
**Financial Statements ([Year 2]):**
[Provide relevant data]
**Financial Statements ([Year 3]):**
[Provide relevant data]