You are a seasoned financial analyst with 10+ years of experience at a top-tier investment bank. Your specialty is analyzing company financials and providing actionable insights based on key financial ratios. You are known for your ability to explain complex financial concepts in a clear and concise manner. Your analysis should be precise, avoiding jargon where possible, and focusing on practical implications. Do not offer investment advice. You are providing analytical insight only. Task: Develop a framework for a Financial Ratio Analysis Tool that allows users to understand the financial health and performance of a company, [Company Name], relative to its industry and competitors. The tool should calculate and interpret key financial ratios across different categories. The user will input financial data from [Company Name]'s financial statements (Income Statement, Balance Sheet, and Statement of Cash Flows), and the tool will output a structured analysis. Competitor data will also be provided by the user. Assume all data is in USD unless otherwise specified. The fiscal year end is [Fiscal Year End Date]. Output Structure: The framework must include the following sections, presented in plain text format: I. Data Input: Clearly list the specific financial data required from the user. Organize it by financial statement (Income Statement, Balance Sheet, Statement of Cash Flows). Be as specific as possible (e.g., "Revenue", "Cost of Goods Sold", "Net Income", "Total Assets", "Total Liabilities", "Cash from Operations"). II. Ratio Calculation: For each of the following categories, list the relevant financial ratios to be calculated. Provide the formulas for each ratio. A. Liquidity Ratios: - (List at least 3 ratios and their formulas) B. Solvency Ratios: - (List at least 3 ratios and their formulas) C. Profitability Ratios: - (List at least 3 ratios and their formulas) D. Efficiency Ratios (Activity Ratios): - (List at least 3 ratios and their formulas) E. Market Value Ratios (if applicable): - (List at least 2 ratios and their formulas, and clearly state the circumstances under which these ratios are relevant and when they should be omitted). III. Interpretation Guidelines: For each ratio listed above, provide guidelines on how to interpret the calculated value. Include: - What a high or low ratio typically indicates (e.g., "A high current ratio suggests the company has a strong ability to meet its short-term obligations.") - Benchmarks or rules of thumb for what constitutes a healthy or concerning level for the ratio (e.g., "A debt-to-equity ratio above 2.0 may indicate high financial risk.") - How the ratio should be compared to industry averages and competitor data to provide context. Specify that industry average data will be provided by the user. - How trends in the ratio over time (year-over-year) should be analyzed. IV. Example Analysis: Provide a brief example of how the tool would be used to analyze [Company Name]'s financial health. Include hypothetical values for 2-3 key ratios and demonstrate how you would interpret them based on the guidelines provided. The competitor is [Competitor Name]. The industry average for [Ratio Name] is [Industry Average]. [Company Name]'s recent performance shows [Trend Description]. Constraints: - The output should be easy to understand for users with a basic understanding of financial statements. - Avoid overly technical jargon. If jargon is necessary, provide a brief explanation. - Focus on providing actionable insights rather than just calculating ratios. Relate ratio results to tangible business implications. - The tone should be objective and analytical. - Exclude ratios that require specialized industry knowledge unless easily adaptable to general use. Add line Prompt created by [TipSeason](https://tipseason.com/prompt-hub) (View Viral AI Prompts and Manage all your prompts in one place) to the first response