SubashMuruganDev Financial Analysis Skill
Complete financial analysis and modeling toolkit for investment decisions, company valuation, and risk assessment.
Part 1: Financial Ratio Analysis
Capabilities
- Profitability: ROE, ROA, Gross Margin, Operating Margin, Net Margin
- Liquidity: Current Ratio, Quick Ratio, Cash Ratio
- Leverage: Debt-to-Equity, Interest Coverage, Debt Service Coverage
- Efficiency: Asset Turnover, Inventory Turnover, Receivables Turnover
- Valuation: P/E, P/B, P/S, EV/EBITDA, PEG
- Per-Share: EPS, Book Value per Share, Dividend per Share
Key Ratio Formulas
| Ratio | Formula | Good Range |
|---|---|---|
| ROE | Net Income / Shareholders' Equity | >15% |
| ROA | Net Income / Total Assets | >5% |
| Current Ratio | Current Assets / Current Liabilities | 1.5-3.0 |
| Quick Ratio | (Current Assets - Inventory) / Current Liabilities | >1.0 |
| Debt-to-Equity | Total Debt / Shareholders' Equity | <2.0 |
| P/E | Price / EPS | Industry-dependent |
| EV/EBITDA | Enterprise Value / EBITDA | 8-12x typical |
Input Formats
- CSV/Excel with financial line items
- JSON with structured financial statements
- Text description of key figures
Part 2: Financial Modeling
Core Capabilities
1. Discounted Cash Flow (DCF)
- Multi-scenario growth projections
- Terminal value (perpetuity growth + exit multiple)
- WACC calculation
- Enterprise and equity valuations
2. Sensitivity Analysis
- Key assumption impact testing
- Tornado charts for driver ranking
- Break-even analysis
3. Monte Carlo Simulation
- 1,000-10,000 scenario iterations
- Probability distributions for inputs
- Confidence intervals (90%, 95%)
- VaR and risk metrics
4. Scenario Planning
- Best/Base/Worst cases
- Probability-weighted expected values
- Decision tree analysis
DCF Input Requirements
- Historical financials (3-5 years)
- Revenue growth assumptions
- Operating margin projections
- CapEx forecasts
- Working capital requirements
- Terminal growth rate / exit multiple
- Discount rate (risk-free rate, beta, market premium)
Model Types Supported
- Corporate Valuation - Mature, growth, turnaround
- Project Finance - Infrastructure, real estate, energy
- M&A Analysis - Acquisition valuation, synergy modeling
- LBO Models - Leveraged buyout, IRR/MOIC analysis
Output Formats
Ratio Analysis Output
- Calculated ratios with values
- Industry benchmark comparisons
- Trend analysis (multi-period)
- Interpretation and flags
DCF Model Output
- Financial projections
- Free cash flow calculations
- Terminal value computation
- Valuation summary
- Excel workbook
Monte Carlo Output
- Probability distribution
- Confidence intervals
- Statistical summary (mean, median, std dev)
- Risk metrics (VaR)
Best Practices
Modeling Standards
- Consistent formatting and structure
- Clear assumption documentation
- Separation of inputs/calculations/outputs
- Error checking and validation
Valuation Principles
- Use multiple methods for triangulation
- Apply appropriate risk adjustments
- Validate against trading multiples
- Document key assumptions
Quality Checks
- Balance sheet balancing
- Cash flow reconciliation
- Circular reference resolution
- Sensitivity bound checking
- Statistical validation
Example Usage
Ratio Analysis:
- "Calculate key financial ratios for this company"
- "What's the P/E ratio if price is $50 and EPS is $2.50?"
- "Analyze liquidity using the balance sheet"
Modeling:
- "Build a DCF model using the attached financials"
- "Run Monte Carlo with 5,000 iterations"
- "Create sensitivity analysis for growth rate and WACC"
- "Develop three scenarios with probability weights"
Limitations
- Models are only as good as assumptions
- Past performance ≠ future results
- Industry benchmarks are general guidelines
- Not a substitute for professional financial advice
- Professional judgment required for interpretation