11 Expert ChatGPT Prompts for Financial Analysis

Financial analysis is a cornerstone of business strategy and investment decisions. With the latest improvements to GPT-4-Turbo (and more updates in the pipeline), ChatGPT is becoming increasingly capable in retrieving, reading and assessing files and financial data.

With Code Interpreter enabled, it can assist financial analysts (and business owners) in their work, providing insights, suggesting analysis frameworks, and aiding in data interpretation.

Here are 11 ChatGPT prompts that can streamline the process of financial analysis.

By the way: You can create your own 'Financials Analyst' in Bizway as a custom GPT Assistant to help you with all of these tasks (and get tailored responses based on your specific business details and background).

1. Financial Ratio Calculation

• The Prompt: "Calculate the current ratio and debt-to-equity ratio for XYZ Corporation using the following balance sheet data..."
• Sample response: "The current ratio is 1.5, and the debt-to-equity ratio is 0.9."
• Additional info to provide: Complete balance sheet figures, fiscal year-end date.
• Use Cases: Solvency analysis, financial health assessment, investor reporting.

2. Trend Analysis

• The Prompt: "Analyze the five-year revenue growth trend for ABC Company."
• Sample response: "ABC Company's revenue has grown by an average of 3% annually over the past five years."
• Additional info to provide: Annual revenue figures, major market events.
• Use Cases: Business performance review, strategic planning, investment appraisal.

3. Industry Benchmarking

• The Prompt: "Compare the gross margin of DEF Industries with the industry average for the tech sector."
• Sample response: "DEF Industries' gross margin is 4% higher than the tech sector industry average."
• Additional info to provide: Firm's financials, industry average statistics.
• Use Cases: Competitive analysis, operational efficiency assessment.

4. Valuation Estimates

• The Prompt: "Estimate the value of Company GHI using the discounted cash flow method with the provided projections and discount rate."
• Sample response: "Based on the DCF method, the estimated valuation of Company GHI is $250 million."
• Additional info to provide: Cash flow projections, discount rate, terminal growth rate.
• Use Cases: M&A analysis, investment valuation, financial advisory.

5. Investment Portfolio Performance

• The Prompt: "Analyze the performance and risk profile of my investment portfolio against the S&P 500 index."
• Sample response: "Your portfolio had a return of 7% compared to the S&P 500's 10%, but with a lower standard deviation, indicating a more conservative risk profile."
• Additional info to provide: Portfolio composition, benchmark index data, time period for comparison.
• Use Cases: Personal finance management, risk management, asset allocation.

6. Break-even Analysis

• The Prompt: "Perform a break-even analysis for product line JKL with the following cost and price details..."
• Sample response: "Product line JKL will break even at 5,000 units sold."
• Additional info to provide: Fixed costs, variable costs per unit, sale price per unit.
• Use Cases: Profitability forecasting, pricing strategy, cost management.

7. Cash Flow Projections

• The Prompt: "Create a 12-month cash flow projection for MNO Enterprise based on past financial data and expected changes."
• Sample response: "MNO Enterprise is projected to have an average monthly cash flow of $30,000 over the next year."
• Additional info to provide: Historical cash flow statements, anticipated revenue changes, expected capital expenditures.
• Use Cases: Financial planning, liquidity management, strategic budgeting.

8. Scenario & Sensitivity Analysis

• The Prompt: "Conduct a sensitivity analysis for PQR Company's profitability based on fluctuations in material costs."
• Sample response: "A 10% increase in material costs would decrease PQR Company's profitability by 5%, whereas a 10% decrease would improve profitability by 6%."
• Additional info to provide: Cost structure, profitability margins, market price data.
• Use Cases: Risk assessment, strategic decision-making, financial modeling.

9. Credit Analysis

• The Prompt: "Assess the creditworthiness of STU Corporation based on its financial statements and credit history."
• Sample response: "STU Corporation has a strong credit profile with a low probability of default, as evidenced by solid financial ratios and a consistent payment history."
• Additional info to provide: Debt levels, interest coverage, payment records.
• Use Cases: Loan underwriting, bond issuance, credit risk evaluation.

10. Cost Reduction Strategies

• The Prompt: "Identify potential areas for cost reduction in VWX Company's manufacturing operations."
• Sample response: "Potential areas for cost reduction include streamlining the supply chain, renegotiating bulk material purchases, and investing in energy-efficient machinery."
• Additional info to provide: Detailed cost breakdown, operational workflow, supplier agreements.
• Use Cases: Operational efficiency, expense management, profitability improvement.

11. Merger Impact Assessment

• The Prompt: "Evaluate the financial impact of a merger between YZ Corporation and its competitor 123 Inc."
• Sample response: "The merger is projected to result in cost synergies of 10%, an increased market share of 5%, and an EPS accretion of 3% for YZ Corporation."
• Additional info to provide: Merger terms, competitor financials, synergy estimates.
• Use Cases: M&A strategy, shareholder value analysis, post-merger integration.

ChatGPT offers the financial analysis field a versatile tool for crunching numbers, synthesizing data, and interpreting complex financial scenarios, freeing analysts to focus more on strategy and less on routine calculations.