ChatGPT Prompts for Financial Analysis

<context> You are a financial analyst reviewing liquidity for [COMPANY]. Balance sheet figures: [FIGURES] (current assets, current liabilities, inventory, cash & equivalents, receivables). Reporting period: [PERIOD]. Industry: [INDUSTRY]. </context> <task> 1. Compute the current ratio, quick (acid-test) ratio, and cash ratio. Show the formula and the inputs used for each. 2. Present results in a table with columns: Ratio | Formula | Value | Interpretation. 3. Flag any ratio below 1.0 and explain the short-term solvency implication. 4. Note 2-3 limitations of these ratios (e.g. seasonality, off-balance-sheet items). 5. End with: "Verify all inputs and outputs against the audited financials before relying on these figures." </task>

<context> You are analyzing profitability for [COMPANY]. Income statement & balance sheet figures: [FIGURES] (revenue, COGS, operating income, net income, total assets, equity). Period: [PERIOD]. </context> <task> 1. Calculate gross margin, operating margin, net margin, ROA, and ROE. Show each formula and the numbers plugged in. 2. Output a table: Metric | Formula | Value. 3. Explain what each metric reveals about [COMPANY]'s earnings quality. 4. Identify which margin is strongest and weakest and offer a hypothesis for why. 5. List the data you would need to benchmark these against peers. 6. Remind me to verify every computed figure against the source statements. </task>

<context> Assess long-term solvency for [COMPANY]. Figures: [FIGURES] (total debt, total equity, EBIT, interest expense, total assets). Period: [PERIOD]. </context> <task> 1. Compute debt-to-equity, debt-to-assets, and interest coverage (EBIT / interest expense). 2. Show formulas and inputs, then present a table: Ratio | Value | What it signals. 3. Classify the leverage profile as conservative, moderate, or aggressive with reasoning. 4. Explain the risk if interest coverage falls below 1.5x. 5. State that these conclusions are analysis support only, not financial advice, and that figures must be verified. </task>

<context> Evaluate operational efficiency for [COMPANY]. Figures: [FIGURES] (revenue, COGS, average inventory, average receivables, average payables, total assets). Period: [PERIOD]. </context> <task> 1. Calculate inventory turnover, receivables turnover (and DSO), payables turnover (and DPO), and asset turnover. 2. Show formulas and inputs for each; output a table. 3. Compute the cash conversion cycle (DSO + DIO - DPO) and explain what it implies for working capital. 4. Suggest 2-3 operational levers that could improve the weakest metric. 5. Note assumptions made about averages and ask me to confirm them. </task>

<context> You are comparing key ratios for [COMPANY] over multiple periods. Multi-period figures: [FIGURES] (provide the same line items for each period). Periods: [PERIOD]. </context> <task> 1. Recompute the core ratios (current, gross margin, net margin, ROE, debt-to-equity) for each period. 2. Present a matrix: Ratio | Period 1 | Period 2 | Period 3 | Trend (up/down/flat). 3. Highlight the two ratios with the most material movement and quantify the change. 4. Offer a hypothesis for each major move, clearly labelled as a hypothesis. 5. Flag any data gaps and remind me to verify all values against the originals. </task>

<context> Build a common-size income statement for [COMPANY]. Income statement figures: [FIGURES] (revenue and each expense/income line). Period: [PERIOD]. </context> <task> 1. Express every line item as a percentage of total revenue. 2. Output a table: Line item | Amount | % of revenue. 3. Identify the three largest cost lines as a share of revenue. 4. Comment on where margin is being lost or preserved. 5. State explicitly that you have not changed any reported figure, only re-expressed it, and ask me to verify the percentages. </task>

<context> Build a common-size balance sheet for [COMPANY]. Balance sheet figures: [FIGURES] (every asset, liability, and equity line). Period: [PERIOD]. </context> <task> 1. Express each asset line as a % of total assets and each liability/equity line as a % of total liabilities + equity. 2. Output two tables (assets; liabilities & equity) with Amount and %. 3. Note the composition of the asset base (e.g. asset-heavy vs. asset-light) and the funding mix. 4. Flag any line that exceeds a reasonable concentration threshold. 5. Confirm totals foot to 100% and ask me to verify. </task>

<context> Perform horizontal analysis for [COMPANY]. Multi-period figures: [FIGURES] (same line items across at least two periods). Periods: [PERIOD]. </context> <task> 1. For each line item, compute the absolute change and the % change versus the prior period. 2. Output a table: Line item | Prior | Current | Change | % change. 3. Rank the five line items with the largest % moves. 4. Group the moves into a short narrative (growth, cost pressure, one-offs) labelled as interpretation. 5. Remind me that % changes off small bases can mislead, and to verify the underlying numbers. </task>

<context> Interpret the cash flow statement for [COMPANY]. Figures: [FIGURES] (operating, investing, financing cash flows; net income; capex; D&A). Period: [PERIOD]. </context> <task> 1. Summarize cash generated/used by each activity and the net change in cash. 2. Compute free cash flow (operating cash flow - capex) and the cash flow to net income ratio. 3. Assess earnings quality: does operating cash flow support reported net income? 4. Flag any reliance on financing inflows to fund operations. 5. Note that this is analysis support, not advice, and ask me to verify the figures. </task>

<context> Check consistency across the three statements for [COMPANY]. Figures: [FIGURES] (net income, depreciation, change in retained earnings, ending cash, beginning cash). Period: [PERIOD]. </context> <task> 1. Verify that net income flows correctly into retained earnings and the cash flow statement. 2. Confirm the cash flow statement's ending cash matches the balance sheet cash. 3. List each linkage checked with a Pass/Fail and the figures compared. 4. For any Fail, describe what could explain the discrepancy. 5. State clearly that a Pass here does not guarantee accuracy and that source data must still be verified. </task>

<context> Run budget-versus-actual variance analysis for [COMPANY]. Figures: [FIGURES] (budgeted and actual amounts per line item). Period: [PERIOD]. </context> <task> 1. For each line, compute the variance (actual - budget) and the % variance, labelling favorable (F) or unfavorable (U). 2. Output a table: Line | Budget | Actual | Variance | % | F/U. 3. Apply a materiality threshold of [THRESHOLD] and list only variances that breach it. 4. For each material variance, list plausible drivers to investigate (do not assert causes). 5. Remind me to verify the figures and confirm the favorable/unfavorable convention matches our reporting. </task>

<context> Decompose a revenue variance for [COMPANY] into price and volume effects. Figures: [FIGURES] (budget vs actual units and price/unit; or total revenue with unit and price detail). Period: [PERIOD]. </context> <task> 1. Compute the price variance and volume variance using the standard decomposition (price variance = (actual price - budget price) x actual volume; volume variance = (actual volume - budget volume) x budget price). 2. Show the formula, the inputs, and the result for each. 3. Confirm the two variances sum to the total revenue variance. 4. State which effect dominates and what it suggests about demand vs. pricing. 5. Ask me to verify the reconciliation and the input figures. </task>

<context> Investigate operating cost variances for [COMPANY]. Figures: [FIGURES] (standard/budget cost and actual cost per category, with volume if available). Period: [PERIOD]. </context> <task> 1. Compute the variance and % variance for each cost category. 2. Where volume data exists, split into rate and efficiency/usage components and show the formulas. 3. Rank categories by absolute unfavorable variance. 4. For the top three, propose specific questions to ask the cost owner — not assumed answers. 5. Note any category lacking enough data to split, and remind me to verify all figures. </task>

<context> Compare the latest forecast to actuals for [COMPANY]. Figures: [FIGURES] (prior forecast and actual results by line and by month/quarter). Period: [PERIOD]. </context> <task> 1. Compute forecast accuracy per line: variance, % variance, and absolute error. 2. Identify which lines are consistently over- or under-forecast across periods. 3. Summarize overall forecast bias (optimistic/pessimistic) with supporting numbers. 4. Recommend which forecast assumptions to revisit, framed as suggestions. 5. Remind me that conclusions depend on data accuracy and must be verified. </task>

<context> Draft management commentary on this period's variances for [COMPANY]. Figures: [FIGURES] (key variances and their confirmed drivers, supplied by me). Period: [PERIOD]. Audience: [AUDIENCE]. </context> <task> 1. Using only the drivers I provided, write 4-6 concise commentary bullets explaining the most material variances. 2. Lead each bullet with the variance figure, then the driver, then the implication. 3. Keep the tone factual and suited to [AUDIENCE]; avoid speculation beyond the drivers given. 4. Add a one-line outlook only if I supplied forward data; otherwise omit it. 5. End by noting the figures should be reconciled to the close before distribution. </task>