{{company_name}}
Company Name
Example: Example: Horizon Technologies Ltd.
Enter the name of the company being analyzed.
Ready to Use
Complete Prompt
This prompt has variables that can be replaced with your own information. Copy and use it with your preferred LLM, or try it out in the LearnerBox Prompt Playground.
Act as an experienced financial analyst specializing in cash-flow analysis and earnings quality.
Assess the quality and sustainability of the company’s cash flows using the information provided below.
Company:
{{company_name}}
Industry:
{{industry}}
Analysis period:
{{analysis_period}}
Cash-flow statement:
{{cash_flow_statement}}
Income statement:
{{income_statement}}
Balance-sheet information:
{{balance_sheet_data}}
Additional management or business context:
{{additional_context}}
Analysis requirements:
1. Analyze cash flows from:
- operating activities;
- investing activities; and
- financing activities.
2. Compare net income with cash generated from operations.
3. Identify and explain material differences between accounting profit and operating cash flow.
4. Calculate the following where sufficient information is available:
- operating cash flow margin;
- operating cash flow to net income;
- free cash flow;
- capital expenditure coverage;
- operating cash flow to current liabilities; and
- cash conversion from earnings.
5. Assess whether operating cash flow appears:
- recurring;
- volatile;
- dependent on working-capital movements;
- influenced by one-off items; or
- insufficient to support reported earnings.
6. Evaluate major investing cash flows and distinguish between:
- maintenance investment;
- growth investment;
- acquisitions;
- asset sales; and
- unusual investing activities.
7. Evaluate financing cash flows, including:
- new borrowing;
- debt repayment;
- dividends;
- share issuance;
- share repurchases; and
- reliance on external financing.
8. Identify possible earnings-quality concerns, such as:
- rising profit accompanied by declining operating cash flow;
- repeated negative free cash flow;
- large unexplained working-capital adjustments;
- asset sales supporting cash generation;
- borrowing used to fund routine operations; or
- dividends exceeding internally generated cash.
9. Distinguish between observations directly supported by the supplied data and interpretations requiring further evidence.
10. Do not invent missing cash-flow classifications, management intentions, or benchmark values.
Present the result as:
{{output_format}}
Include:
- an executive summary;
- cash-flow trend table;
- operating cash-flow analysis;
- profit-to-cash reconciliation;
- investing cash-flow analysis;
- financing cash-flow analysis;
- free cash-flow assessment;
- earnings-quality indicators;
- major strengths;
- warning signals;
- information gaps;
- questions for management; and
- a conclusion on cash-flow quality and sustainability.Customization Variables
Replace each variable shown in double curly brackets with accurate information from your own professional context.
{{industry}}
Industry
Example: Example: Enterprise software
Industry context may help interpret capital intensity and working-capital patterns.
{{analysis_period}}
Analysis Period
Example: Example: Financial years 2023 to 2025
Specify all reporting periods included in the review.
{{cash_flow_statement}}
Cash-Flow Statement
Example: Paste the operating, investing, and financing cash-flow sections.
Include comparative periods where possible.
{{income_statement}}
Income Statement
Example: Paste revenue, operating profit, net income, depreciation, and other relevant figures.
This allows comparison between reported profit and cash generation.
{{balance_sheet_data}}
Balance-Sheet Information
Example: Include receivables, inventory, payables, debt, cash, and capital expenditure information.
Balance-sheet movements help explain changes in operating cash flow.
{{additional_context}}
Additional Context
Example: Example: The company completed a major acquisition and expanded into two new markets.
Add events that may explain unusual cash flows.
{{output_format}}
Output Format
Choose the presentation style appropriate for the audience.
Expected Output
A rigorous cash-flow quality report containing cash-flow trends, profit-to-cash reconciliation, free cash-flow analysis, investing and financing observations, earnings-quality indicators, risks, management questions, and a qualified sustainability conclusion.
💡 Important:
The quality of the result depends on the
completeness, accuracy, and relevance of the
information supplied to the AI.
Prompt Characteristics
These characteristics describe the type of thinking, customization, and output structure involved in using this prompt effectively.
Prompt Anatomy
This breakdown explains how the prompt’s major components work together to guide the AI toward a useful, reliable, and well-structured response.
Role
Positions the AI as a specialist in cash-flow analysis and earnings quality.
Context
Provides the company, industry, reporting periods, three financial statements, and business events.
Task
Directs the AI to assess cash generation, free cash flow, and the relationship between earnings and cash.
Constraints
Prevents invented classifications, unsupported management intentions, and unverified benchmarks.
Output Structure
Requires trend analysis, profit-to-cash reconciliation, activity-level review, risks, questions, and conclusion.
Input Variables
Company, industry, analysis period, cash-flow statement, income statement, balance-sheet data, additional context, and output format.
Customization Tips
- Provide at least three reporting periods to distinguish persistent patterns from one-year fluctuations.
- Include working-capital movements and non-cash charges where available.
- Distinguish maintenance capital expenditure from expansion capital expenditure.
- Add details of acquisitions, divestments, refinancing, dividends, and share repurchases.
- State whether the output is intended for management, investors, lenders, or an audit committee.
Responsible Professional Use
Review Before Applying the Output
AI-generated responses can contain errors, omissions, unsupported assumptions, outdated information, or recommendations that do not reflect your jurisdiction or professional context.
Verify calculations, evidence, regulations, standards, policies, and professional recommendations before relying on the result. The qualified professional remains responsible for the final decision.