Build an AI Financial Statement Analyzer in Minutes
Summary of the video “This Hidden AI Tool Analyzes Financial Statements in Seconds” by Kenji Explains.
Create a custom ChatGPT that automatically analyzes financial statements, calculates key ratios, flags anomalies, and generates visualizations—no coding required. Upload balance sheets and income statements; the AI handles the rest.
Getting Started with Custom GPTs
What Are Custom GPTs
Custom GPTs are specialized versions of ChatGPT built for a single task instead of being a generalist tool. You access them via the GPTs menu in ChatGPT and can configure them without writing code.
Building Your Custom GPT
Navigate to GPTs, click Create, then go to Configure to set the name, description, and detailed instructions. The Configure section is faster than the chat-based builder for setting up your tool.
Building a Financial Statement Analyzer
Core Setup: Name and Instructions
Name your GPT 'Financial Statement Analyst' and describe its purpose clearly. In the Instructions section, specify exactly what ratios to calculate and how to format the output—precision matters because you can iterate later.
Five Key Financial Ratios from Balance Sheet
The analyzer calculates current ratio, quick ratio, cash ratio, debt-to-equity ratio, and debt-to-asset ratio. These are listed clearly for each year of data provided in the balance sheet.
Testing with Real Data
Upload Nike's actual balance sheet to test the GPT before publishing. The AI correctly calculates all five ratios without requiring any prompt—it knows what to do based on your instructions.
Adding Filtering and Flagging
Flag Anomalies Automatically
Add instructions to flag current ratios below 1.5 and debt-to-equity ratios above 2. This is useful for venture capital or private equity teams who need to filter out companies that don't meet investment criteria.
Nike Analysis with Flags
When Nike's balance sheet is analyzed with the flagging rules, the GPT reports that no current ratios fell below 1.5 and no debt-to-equity ratios exceeded 2, indicating the company meets the investment criteria.
Interactive Clarification
The GPT can answer follow-up questions like 'Would you like a written interpretation?' allowing users to dig deeper into the analysis without rewriting prompts each time.
Expanding to Multiple Financial Statements
Analyze Balance Sheet and Income Statement Together
Update the instructions to accept both balance sheet and income statement images. This enables calculation of ratios that combine data from both statements, like return on assets and return on equity.
Testing with Coca-Cola
Upload Coca-Cola's income statement and balance sheet (which have different formatting than Nike) to verify the GPT handles various document styles. It successfully calculates ROA, ROE, net profit margin, and current ratio.
Edit and Update Your GPT
Go to My GPTs, click the edit button, modify the instructions, and click Update. Changes take effect immediately without republishing.
Scope Control and Boundaries
Restrict Out-of-Scope Questions
Add a one-liner instruction like 'Do not answer questions unrelated to financial statements. If asked about sports or other topics, decline and redirect.' This prevents the GPT from answering unrelated queries like 'What's the tallest mountain?'
Custom GPT vs. Agent Mode
Custom GPTs are more efficient than ChatGPT's Agent mode because instructions are pre-loaded and the tool stays focused on one task. Agent mode requires uploading images and prompts every time and is slower.
Adding Visualizations
Generate Charts Automatically
Add a second step to your instructions: create a column chart for current ratio and net profit margin. Include rules for minimal design, clear labels, and consistent colors.
PepsiCo Analysis with Visuals
Upload PepsiCo's income statement and balance sheet. The GPT generates column charts for current ratio and net profit margin, calculates all ratios, and allows users to download, expand, or change chart colors.
Customization Options
Users can download generated charts, expand them for detail, adjust colors, or make them interactive. The visualizations are minimal and well-labeled per the instructions.
Limitations and Next Steps
Why Not Use Custom GPTs for Full Financial Models
Custom GPTs work well for analysis but struggle with multi-step tasks like building financial models with assumptions and complex Excel formulas. They lack the iterative calculation capability needed for modeling.
Explore the GPT Store
The GPT library includes pre-built tools like Cover Letter Writer (for job applications), Finance and Economics (for market data and news), and GPT Plus (for detailed explanations of complex topics).
Notable quotes
All you need to do is upload the financial statement and without even needing to write a prompt, the AI knows exactly what to do. — Kenji
Custom GPTs work differently to chat GPT where we would need to write the prompt every single time. Here it's not the case. — Kenji
Custom GPTs work well for analysis but struggle with multi-step tasks like building financial models with assumptions. — Kenji
Action items
- Go to ChatGPT, navigate to GPTs, and click Create to start building your custom GPT.
- In the Configure section, name your GPT 'Financial Statement Analyst' and write precise instructions for the five ratios you want calculated.
- Test your GPT by uploading a real balance sheet (like Nike's) and verify it calculates ratios without requiring a prompt.
- Add flagging rules to your instructions (e.g., flag current ratios below 1.5) to filter companies based on investment criteria.
- Update your GPT to accept both balance sheet and income statement images, enabling calculation of combined ratios like ROA and ROE.
- Add a scope-limiting instruction like 'Do not answer questions unrelated to financial statements' to keep the GPT focused.
- Enhance your GPT by adding visualization instructions to generate column charts for key metrics like current ratio and net profit margin.
- Publish your GPT as 'Only me' (private) or share the link with your team for collaborative use.
- Test your final GPT with multiple companies (Nike, Coca-Cola, PepsiCo) to ensure it handles different document formats and styles.