The analyst: from the accounts to the report

Session: two hours, in two sittings: the first on the first set of accounts, the second to build the skill and try it on the second. You need: two annual reports of the same company, in PDF, with the notes to the accounts (for the test, the annual report of a listed company, public on its website, is fine); the report template your office uses, even just as an outline; a tool that runs code (stage 7).

People who analyse companies always do the same work on documents that are always different: they read the accounts, reclassify them, calculate the ratios, compare with the year before, write an assessment. It is the perfect case for a custom assistant, and also the case where a mistake costs most, because a ratio wrong by a decimal point changes a credit decision. Today you do the work once by hand with the model, and the second time you have a skill do it, with the checks that stay yours. The example in this stage was actually run, on the 2025 consolidated annual report of Brunello Cucinelli, 344 pages: the figures quoted are those.

1. The accounts, read without calculating

Upload the annual report (stage 3) and ask only for the transcription: "Report the statement of financial position and the income statement for the last two years in two tables, line by line, with the values as they stand in the document and the page number each line comes from. Do not reclassify and do not calculate anything. If a line is not legible, write "illegible" and the page." Check two things before going on: that total assets equal total liabilities and equity in both columns, and three lines at random against the PDF. In the example the tables are on pages 230-232, in thousands of euro, and the totals balance: 2,022,260 in 2025, 1,744,893 in 2024. A badly scanned report shows up here, not later.

2. The reclassification, with code

Now the sums, and the code does them, not the model in its head (stage 7): "From the two tables, build the statement of financial position reclassified on a financial basis (fixed assets and current assets; equity, long-term liabilities and current liabilities) and the value-added income statement (value of production, value added, gross operating margin, operating income, net income). Calculate ROE, ROI, ROS, the ratio of assets to equity, net financial position over gross operating margin, days sales outstanding. Run the calculations with code and show me, for each ratio, the formula and the lines used. If a line could go in two places, stop and ask me." The first check is that the operating income rebuilt from value added comes out equal to the one in the accounts: in the example 227,784, to the thousand.

The questions the model asks you at this step are the point, and two are almost certain. The first: the gross operating margin calculated as value added minus payroll (417,273 in the example) does not match the EBITDA the company declares (408,396, page 42), because the company puts impairments and provisions below EBITDA. The second: do the lease liabilities for the shops (IFRS 16, 786 million) go into the net financial position or not? Without them the company is at half its EBITDA; with them, at 2.4 times. The company itself keeps them on two separate lines (page 41). You answer, and the answers become rules in step 4.

3. The assessment, with the evidence alongside

"Write ten lines of assessment of the company: profitability, solidity, liquidity, and what has changed from the year before. Every statement with the figure that supports it and the page of the report. If the notes explain a change, quote them in quotation marks with the page. Do not give a credit opinion: line up the elements." Then the critical reader, as in stage 3: "You are the head of credit receiving this report: what three questions do you ask the analyst before signing?" Those three questions go into the report before anyone asks them for real.

4. The "Analysis report" skill

The second time you explain nothing again (stage 14). The instructions are the three steps above, in order, plus the rules born from the questions in step 2 and the outline of your report; attach the Word template of the report and, if the office has one, the glossary of line items. The example to adapt:

You are the analyst who prepares the standard financial statement analysis report of the [name] office. You receive one or two annual reports in PDF. Proceed in three phases, each with my go-ahead: transcription of the tables with page numbers and balancing of the totals; financial and value-added reclassification with the ratios calculated by code, formulas shown; a ten-line assessment with a figure and a page for every statement. Fixed rules: use the definition of EBITDA the company declares among its alternative performance measures and, if your gross operating margin differs, show the reconciliation; show the net financial position with and without lease liabilities and say which one you use in the assessment; prepayments and accrued income go in current assets, receivables due beyond one year in fixed assets, provisions for risks in long-term liabilities. Do not give a credit opinion. Produce the report in the attached template, with the tables in an appendix. Where a figure is missing, write "not available" and do not estimate it.

Call it on the second set of accounts with one line: "[skill name]. 2025 annual report of the same company, attached. Compare with 2024."

5. The check, which stays yours

Three figures redone by hand with the report in front of you, one of them a ratio: if the ROI comes out right, so does what lies beneath it. The balancing of totals in every table. Then the strongest comparison, when it exists: many companies publish in the directors' report their own reclassified statement of financial position and income statement (in the example on pages 41 and 48); put yours beside them and explain every difference, because each one is either a classification choice to declare or a mistake. Finally the notes on the line that changed most: in the example the "normalised operating income" (235,851, page 42) excludes a provision for the exposure to a customer in difficulty, a non-recurring fact that changes the reading of profitability, and it sits in a line the model quotes only if you asked for it. On assessments stage 4 applies: the model writes "solid" in the same tone in which it writes "fragile". The result of the test, transcription, reclassified statements and ratios as Excel formulas, with the rules and checks on a separate sheet, can be downloaded from librovivoia.it/prova/financials: open it next to the annual report and compare it with what you get.

With a connected database

If your office has a financial data service that connects as a connector (stage 16), with company profiles, accounts, announcements and news the model can query (Bigdata.com is one of them, paid), the skill is the same and the source changes: instead of the uploaded PDF, the model asks the service for the data, and step 1 becomes "report the data as the source returns it, with the date and the document identifier". The check in step 5 does not change: a figure that arrived through a connector looks the same as a figure read well or read badly.

What you just saw

The fixed outline of the report is the skill; the code does the sums; every figure carries the page it comes from. They are three stages already done, 14, 7 and 3, lined up on one job. And the two questions of step 2 say something that holds beyond these accounts: the definitions are decided by the analyst, not by the model, and they are written once, in the skill. Chapter 4 explains why a model is not to be used as a calculator and how to have it run code; chapter 7 describes the invention of data in the section on hallucinations; chapter 9 says who checks, and what. A warning on data: a filed annual report is public, an interim statement or a business plan is not, and for those stage 3 and the section "The data that do not leave" apply.

In the book. Chapter 4, section 4.1 "Adapting a model to your own material", page 84; chapter 7, section 7.1 "When AI invents: the problem of hallucinations", page 118; chapter 9, sections 9.5 "Who verifies, and what", page 146, and 9.6 "The data that do not leave", page 147. The book on Amazon.