Analyze financial statements with AI assistance
Use a small financial statement extract to calculate growth, margins, and liquidity, then ask AI to explain the results within the evidence. Keep reporting periods, source references, and unanswered questions visible throughout the analysis.
Before you start
No coding required
A source-linked financial comparison with checked ratios and bounded interpretation.
- Familiarity with revenue
- expenses
- assets and liabilities
- Text-capable AI chat — access: varies
- Calculator or spreadsheet — access: varies
AI can help structure a financial comparison and draft questions for further investigation. It needs reliable figures and clear definitions. You will calculate a few measures yourself, then ask for an explanation that stays within the inputs.
Use a text-capable AI chat and a calculator or spreadsheet. No coding or upload is required. You should recognize revenue, operating profit, assets, and liabilities. Timing has not been measured.
1. Establish the source and period
The following is an original synthetic extract, not a real company’s accounts or a complete set of statements. Income figures cover the years ended 31 December; balance-sheet figures are at each year end. All values are USD thousands. Tax, interest, cash flows, and accounting notes are intentionally omitted.
| ID | Metric | 2024 | 2025 |
|---|---|---|---|
| F1 | Revenue | 1,000 | 1,200 |
| F2 | Cost of sales | 600 | 780 |
| F3 | Operating expenses, excluding cost of sales | 250 | 300 |
| F4 | Current assets | 400 | 450 |
| F5 | Current liabilities | 200 | 300 |
| F6 | Total assets | 900 | 1,050 |
| F7 | Total liabilities | 400 | 500 |
| F8 | Equity | 500 | 550 |
For real US public-company analysis, use the filing itself and keep its period, units, page, and note references. The SEC’s How to Read a 10-K identifies financial statements and management discussion as relevant sections. Our limited extract cannot replace those statements or their notes.
2. Calculate a small set of measures
Use cost of sales separately from the listed operating expenses:
Gross profit = Revenue - Cost of sales
Operating profit = Gross profit - Operating expenses
Margin = Profit / Revenue
Revenue growth = (2025 revenue - 2024 revenue) / 2024 revenue
Current ratio = Current assets / Current liabilities
Balance-sheet difference = Assets - Liabilities - Equity
| Measure | 2024 | 2025 |
|---|---|---|
| Gross profit, USD thousands | 400 | 420 |
| Gross margin | 40.0% | 35.0% |
| Operating profit, USD thousands | 150 | 120 |
| Operating margin | 15.0% | 10.0% |
| Current ratio | 2.00 | 1.50 |
| Balance-sheet difference, USD thousands | 0 | 0 |
Revenue grows 20.0%. Operating profit declines 20.0%. Both margins fall by 5.0 percentage points. A zero denominator makes the corresponding ratio unavailable; negative baselines need an agreed interpretation. Round displays, not intermediate calculations.
3. Request an evidence-linked analysis
Paste both tables into this prompt:
Analyze this synthetic financial extract, using only the supplied figures.
[Paste the input and checked-measures tables above.]
Income values cover years ended 31 December 2024 and 2025. Balance-sheet
values are at those year ends. Amounts are USD thousands.
First verify gross profit, operating profit, margins, current ratio, and balance
sheet identity. Use F1–F8 to identify inputs for every finding.
Then draft under 150 words on growth, profitability, and liquidity indicators.
Separate observations from unknown causes. Do not claim cash-flow strength,
solvency, industry superiority, investment attractiveness, or future performance.
End with three questions requiring additional evidence.
4. Review the interpretation
Illustrative checked editorial output:
Revenue increased 20.0%, from 1,000 to 1,200 (F1), while operating profit fell from 150 to 120, a 20.0% decline (F1–F3). Gross margin fell from 40.0% to 35.0%; operating margin fell from 15.0% to 10.0%, both decreases of 5.0 percentage points. The current ratio declined from 2.00 to 1.50 (F4–F5). These figures do not establish the causes or cash available to meet obligations. What explains the cost-of-sales change? What is the composition and collectability of current assets? What do the cash-flow statement and debt maturity notes show?
Check each formula and reference. The balance-sheet identity confirms internal arithmetic, not an audit. A current ratio does not reveal receivable quality or payment timing. Higher revenue alone does not prove a stronger business.
Common mistakes and reuse
If AI calls 1,200 “USD 1,200” without the thousands scale, correct the units. If it explains lower margins as inflation, request supporting evidence or remove the cause. If it discusses cash generation, supply a cash-flow statement before proceeding.
For practice, change 2025 cost of sales to 720. Gross profit becomes 480 and gross margin 40.0%; operating profit becomes 180 and operating margin 15.0%. Confirm the revised commentary changes accordingly. For real analysis, include accounting policies, relevant notes, and comparable periods before expanding the measures.
All business figures are original synthetic data. The SEC source supports filing navigation only. Outputs are editorial illustrations; a named AI service run and reader pilot remain prepublication checks.