Analyzing Financial Statements

Financial Ratio Calculator Skill

This skill provides comprehensive financial ratio analysis for evaluating company performance, profitability, liquidity, and valuation.

Capabilities

Calculate and interpret:

• Profitability Ratios: ROE, ROA, Gross Margin, Operating Margin, Net Margin
• Liquidity Ratios: Current Ratio, Quick Ratio, Cash Ratio
• Leverage Ratios: Debt-to-Equity, Interest Coverage, Debt Service Coverage
• Efficiency Ratios: Asset Turnover, Inventory Turnover, Receivables Turnover
• Valuation Ratios: P/E, P/B, P/S, EV/EBITDA, PEG
• Per-Share Metrics: EPS, Book Value per Share, Dividend per Share

How to Use

• Input Data: Provide financial statement data (income statement, balance sheet, cash flow)
• Select Ratios: Specify which ratios to calculate or use "all" for comprehensive analysis
• Interpretation: The skill will calculate ratios and provide industry-standard interpretations

Input Format

Financial data can be provided as:

• CSV with financial line items
• JSON with structured financial statements
• Text description of key financial figures
• Excel files with financial statements

Output Format

Results include:

• Calculated ratios with values
• Industry benchmark comparisons (when available)
• Trend analysis (if multiple periods provided)
• Interpretation and insights
• Excel report with formatted results

Example Usage

"Calculate key financial ratios for this company based on the attached financial statements"

"What's the P/E ratio if the stock price is $50 and annual earnings are $2.50 per share?"

"Analyze the liquidity position using the balance sheet data"

Scripts

• calculate_ratios.py: Main calculation engine for all financial ratios
• interpret_ratios.py: Provides interpretation and benchmarking

Best Practices

• Always validate data completeness before calculations
• Handle missing values appropriately (use industry averages or exclude)
• Consider industry context when interpreting ratios
• Include period comparisons for trend analysis
• Flag unusual or concerning ratios

Limitations

• Requires accurate financial data
• Industry benchmarks are general guidelines
• Some ratios may not apply to all industries
• Historical data doesn't guarantee future performance