Analyzing Financial Statements

What this skill does

• •Computes liquidity ratios including current, quick, and cash ratios
• •Evaluates profitability via ROE, ROA, and various margin calculations
• •Generates valuation metrics like P/E, P/B, and EV/EBITDA
• •Analyzes leverage through debt-to-equity and coverage ratios
• •Provides textual interpretation of calculated values and trends

When to use it

• ✓When assessing the fiscal health of a company during due diligence
• ✓When automating the generation of quarterly investment summaries
• ✓When comparing the performance of multiple firms within the same sector
• ✓When calculating per-share metrics from provided annual report data

When not to use it

• ✕When performing real-time high-frequency trading calculations
• ✕When working with highly speculative or non-standardized crypto-asset data
• ✕When you require audited financial statements for regulatory compliance

How to invoke it

Example prompts that trigger this skill:

• “Calculate the current ratio and debt-to-equity ratio for the attached balance sheet.”
• “Perform a comprehensive profitability analysis for this firm over the last three fiscal years.”
• “What is the P/E and PEG ratio based on these earnings and the current stock price of $120?”
• “Interpret these inventory turnover figures in the context of the retail industry.”
• “Generate a summary report comparing liquidity metrics between these two balance sheets.”

Example workflow

1. Upload the financial dataset in CSV or JSON format.
2. Request specific ratio calculations relevant to the current business inquiry.
3. Execute the analysis script to derive raw metrics from the source data.
4. Run the interpretation module to contextualize the findings against industry benchmarks.
5. Generate a summary output report featuring the calculated values and observations.

Prerequisites

• –Claude API key
• –Python 3.x environment
• –Financial data in a structured format (JSON, CSV, or Excel)

Pitfalls & limitations

• !Relies entirely on the accuracy of the provided raw financial data
• !Industry benchmarks are general references and may not match niche sectors
• !Interpretation modules are intended as support and do not replace professional accounting advice

FAQ

How it compares

Unlike manual spreadsheet calculations which require building and updating formulas, this skill automates both the math and the interpretive writing, providing immediate context for the results.

Source & trust

From the source: “# 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 - **Liq…”

# 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

1. **Input Data**: Provide financial statement data (income statement, balance sheet, cash flow)
2. **Select Ratios**: Specify which ratios to calculate or use "all" for comprehensive analysis
3. **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

1. Always validate data completeness before calculations
2. Handle missing values appropriately (use industry averages or exclude)
3. Consider industry context when interpreting ratios
4. Include period comparisons for trend analysis
5. 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

Quoted from anthropics/claude-cookbooks for reference — see the original for the authoritative, latest version.

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