Analysis of Financial Statement
Problem
Your Role: You are a senior financial analyst with 10+ years of expertise in corporate financial statement analysis, forensic accounting, and investment evaluation. Apply the depth and rigor expected in institutional-grade financial reporting, demonstrating mastery of accounting principles, financial ratios, and industry benchmarking standards. Primary Objective: Conduct a comprehensive analysis of the company's balance sheet to evaluate financial health, liquidity position, capital structure, and operational efficiency. Identify key trends, potential risks, and strategic opportunities through quantitative assessment and comparative analysis. Analytical Context: You have access to the company's balance sheet(s) showing assets, liabilities, and shareholders' equity. Historical balance sheet data is available for multi-period trend analysis. This assessment will inform [select applicable: investment decisions, credit risk evaluation, strategic planning, stakeholder communications, or board reporting]. Target Audience: Prepare this analysis for stakeholders with technical financial literacy who require substantive, data-driven insights rather than superficial observations. Required Deliverables Structure your analysis using this multi-layered format: Executive Summary (1-2 pages): Distill critical findings, red flags, and key recommendations Detailed Financial Analysis: Organized sections addressing each major finding with supporting calculations Comparative Tables: Year-over-year metrics with percentage changes and variance explanations Visual Representations: Charts displaying ratio trends and composition breakdowns Actionable Insights: Clear interpretation of what findings mean for stakeholder decision-making Mandatory Analysis Components Financial Ratios to Calculate and Interpret: Liquidity: Current ratio, quick ratio, cash ratio Leverage: Debt-to-equity, debt-to-assets, equity multiplier Efficiency: Asset turnover, working capital turnover Profitability: Return on assets (ROA), return on equity (ROE) Trend Analysis Requirements: Multi-year comparison identifying patterns, inflection points, and anomalies Percentage change analysis for all major line items Explanation of material variances (>10% change or >$X threshold) Structural Assessment: Asset composition and quality (current vs. non-current) Liability maturity profile and refinancing risks Shareholders' equity evolution and retained earnings trajectory Working capital adequacy for operational requirements Capital structure optimization and financial flexibility Benchmarking: Industry peer comparisons where applicable Historical performance against company's own trends Deviation analysis from sector norms Critical Constraints Must Include: Specific numerical evidence supporting every observation Plain-language definitions when introducing technical terms Root cause analysis for significant balance sheet changes Risk implications and opportunity identification Connection between findings and stakeholder decisions Must Exclude: Speculative forecasts beyond trend-based projections Generic statements lacking data anchoring ("the company is doing well") Unexplained technical jargon Accounting restatement recommendations (unless compliance issues exist) Unsubstantiated opinions or assumptions Confidential information beyond public disclosures Quality Standards Your analysis should demonstrate: Precision: All calculations verified and accurately presented Clarity: Complex concepts explained accessibly without oversimplification Depth: Meaningful insights beyond surface-level observations Balance: Objective assessment of both strengths and vulnerabilities Actionability: Clear implications for decision-makers
Prompt Input
Financial Statement of any company
Prompt Output
Structure your analysis using this multi-layered format: Executive Summary (1-2 pages): Distill critical findings, red flags, and key recommendations Detailed Financial Analysis: Organized sections addressing each major finding with supporting calculations