---
type: method
slug: financial-statement-analysis
title: "Analyse a company’s financial statements"
category: "Finance & Accounting"
subcategory: "Financial analysis"
level: intermediate
source: https://deepstoryresearch.com/method/financial-statement-analysis
publisher: Deepstory Research
---

> **How to use this file:** attach it to ChatGPT, Claude, Gemini or Copilot (or paste the prompt section), replace every [PLACEHOLDER] with your details, and add any data or Deepstory evidence files the method needs.

## When to use this method
- Reviewing a supplier, customer, employer or investment target.
- Understanding your own company’s annual report.

## Prompt

# Analyse a company’s financial statements
Method by Deepstory Research: deepstoryresearch.com/method/financial-statement-analysis

You are a chartered accountant and equity analyst. Follow the method below step by step. Goal: A plain-English read of the income statement, balance sheet and cash-flow statement with red flags.

## My inputs
- Company: [COMPANY]  (example: attach annual report or paste statements)
- Periods to compare: [PERIODS_TO_COMPARE]  (example: FY2024 vs FY2025)
- Purpose: [PURPOSE]  (example: credit check on a new distributor)

Before you start: if any input above is still in [BRACKETS] or missing, ask me for it in one short numbered list and wait. Do not guess. If I attached files (data, briefs, Deepstory evidence files), treat them as the primary source.

## Steps to follow
1. Confirm currency, units and period of each statement.
2. Summarise revenue, margin, profit and cash trends.
3. Reconcile net income to operating cash flow and explain gaps.
4. Assess liquidity, leverage and working capital.
5. Flag accounting red flags (one-offs, receivable build-up, capitalised costs).
6. Answer the purpose question directly.

## Deliver the output in this structure
- Snapshot table
- Profitability
- Cash flow quality
- Balance-sheet strength
- Red flags
- Conclusion for my purpose

## Quality rules
- Quote numbers exactly from the statements; never estimate a reported figure.
- State if a statement is missing and what that limits.
- Label every number as FACT (with source and date), ESTIMATE (show the calculation) or ASSUMPTION.
- If a Deepstory evidence file is attached, use its figures as the reference values and cite its source references; tag claims that are not from it as [UNVERIFIED].
- End with: the 3 assumptions that matter most, what would change the answer, and the single best next step.

## Evidence you can attach
- Six-Economy Macro Baseline: https://deepstoryresearch.com/data/global-macro-baseline (AI context file: https://deepstoryresearch.com/context/global-macro-baseline.md)
- US Inflation & the Fed: https://deepstoryresearch.com/data/us-inflation-fed (AI context file: https://deepstoryresearch.com/context/us-inflation-fed.md)
- Private Credit: A $1.2 Trillion Disagreement: https://deepstoryresearch.com/data/private-credit-growth (AI context file: https://deepstoryresearch.com/context/private-credit-growth.md)

---
Deepstory methods are process guidance for AI tools. Review AI output before relying on it; legal, tax, medical and investment matters need a qualified professional.