GPT-4 can do Financial Statement Analysis!!!

To know that you can do Financial Statement Analysis with GPT-4 and ChatGPT is just insane and mindblowing. You don't even have to format the data.

Just simple copy paste and asking questions, ChatGPT powered by GPT-4 can find risks, calculate RAC scores and make stock advice. It can also find interesting insights rom Balance Sheet Analysis.

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[maureen]

🎯 Key Takeaways for quick navigation:

00:00 📊 GPT-4 can perform financial statement analysis.
01:40 📈 GPT-4 can assess risks and calculate RAC scores based on balance sheet data.
03:55 📉 Interest rate risk is identified as the highest threat to a bank's financial solvency.
04:53 💼 GPT-4's analysis suggests a bank's relative stability but not absolute certainty.
08:48 ⚖️ GPT-4 provides balanced insights on a company's financial position and potential risks.

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[NickWindham]

Wow, that’s incredible! I have a lot of training as a financial analyst and will be using this.

[sanjaybhatikar]

How well did it use the information your provided (balance sheet) to tweak its response? The responses are general truths rather than analysis that takes advantage of the information provided.

[fernandodiaz]

I have done a new test. This time I have used the free version of chatGPT with the AIPRM chrome extension. The result was very similar to the one generated by the GPT-4 chat in your video.

[coolstring]

Given what we know about how GPT works (meaning next word prediction), I wouldn't trust this without it explicitly using the Wolfram Alpha beta plugin.

It's hard to say whether mathematical knowledge could be captured by the word/text associations contained in GPT's model of the world. For example, is knowing that the characters "1 + 1 =" tend to be followed by "2" the same as actually having a function that manipulates bits to calculate this?

I would guess that with more complex calculations, word/character associations are probably less likely to accurately map to the actual output you'd get from a calculator like Wolfram.

If it leverages plugins (like calculators and other data stores) and is double- checked by someone with finance expertise, then I think this use case definitely has some potential.

[kiranhipparagi]

Hello. I found your video very helpful for my pdf processing needs using OpenAI. I tried similar approach with hugging Face's language models, but the results are often inaccurate. I'm unsure if it's a model or embeddings issue. I'm thinking of leaving a comment to get advice on improving results with hugging Face's method. Any help would be appreciated. Thankyou!!😊

[pintukumarsingh]

Data you share may be not correct and not contain amount of information which required to take correct position. But however this will help us take decision. I am usng also this to get more clarity form last few months.

[jawadmansoor]

hi, I am ACCA from Pakistan. I can do analysis of financial statements. I would say that GPT4 is good, it is even better than many people I know. Though it is not domain expert (I would not take it's guidance against an ACCA member who has worked in industry for over 5 years) I would still ask it to look out for dangers while making my own assessment.

Also, your assessment of poor financial strength from a very old balance sheet is incorrect, GPT4 managed to give better assessment. The reason bank is in finical distress can't be assessed from this very OLD BS i.e. there might have been many other things during that time that lead to this situation.

[muratuzer]

I don’t think we’re there yet. At this point Chat GP is nothing more than a better calculator or assistant to put information together. I’m emphasizing “at this point” because at some point in the future things might be different but for the foreseeable future we financial accountants will still be indispensable.

[sanjaybhatikar]

Be very careful doing balance sheet analysis with generative AI. It can often make mistakes with simple mathematics. I am talking arithmetic, not even calculus.

[oliverli]

it's done a good job despite the assessment that the bank is in good health. because it was indeed in good health, and then there came the anti-crypto politicians who ruin the banks crypto environment, and then there was a bank run, and finally, the bank went under.

[fernandodiaz]

Thank you for the information. I've tried the same question in chatGPT of Bing. Previously, I made some adoption on the way the chat of BING understand the I was copying the Balance Sheet as CSV file. The answer I obtained it was appropiated but the Bing chatGPT couldn't provide me the RAC score because rhe chat of Bing said it is not familiar with it.

[guilhermepaulino]

Financial analysis involves substantially more than a simple balance sheet. The sort of problems which led to SVB failure is not in explicit in the balance sheet. You need to understand the matching of assets and liabilities with respect to duration and timing of cash flows. May it is in the notes to the financial statements, may only management and the Fed has that information…. In short you are feeding insufucient information to GPT4 and expecting it to find things beyond what is possible with what you gave it…

[greyowlaudio]

"Let's apply GPT-4 to SVB's financial statements so we can see if they're really that bad."
*computer explodes*
"Ah, I see it worked."

[mhb]

Covered langchain yet? An indepth look of how it works would be nice.

[TrekMercier]

Have you tried to add the profit&loss statement to the balance sheet input. Would that add more insight for gpt4.
And in the svb case what would happen if you add specific duration mismatch between asset and liabilities? Very busy interesting.

[adefianon]

I think more quantitive indicators like calculation of solvency ratios etc could have been more useful

[jeffdavis]

I did similar and also with credit suisse then asked about who’s next on needing a bailout… it suggested Deutsche(but I hadn’t provide any financial information on db).

[shitalgandhi]

Sorry its not detailed. Its superficery. What you can check is their Debt, leverage, gear ratios, Dupont analysis, RoA, vs RoCe, etc, these all things determine whether balance sheet going in right direction or not and comlany makeing enough cash to pay its payables. Thanks

[utkarshgupta]

Please use ur screen away from the chat where u r typing