Finance

Intro

Confidence: 3 / 5 - LLMs do a decent job explaining qualitative portions of finance and performing on-off calculations. LLMs struggle with building robust models.

As an MBA student, having a strong foundation in financial analysis and valuation is essential. These prompts are designed to help you gain a deeper understanding of key concepts and techniques, enabling you to make informed decisions and create value for your company or client.

By working through these prompts, you'll learn how to:

1. Apply regression analysis and other statistical tools to uncover insights and support decision-making

2. Calculate and interpret Total Enterprise Value using WACC or APV methods

3. Use IRR analysis to evaluate and prioritize investment opportunities

4. Understand and apply Discounted Cash Flow (DCF) analysis for valuation purposes

5. Build and use interactive financial models to support decision-making and analysis

6. Apply Real Option Valuation techniques to assess the value of flexibility in decision-making

Regression Analysis and Other Statistical Tools

Tailor your learning of regression analysis and statistical tools to your background and goals.

Prompt

[Action]: Provide a step-by-step guide on how to perform regression analysis and explain its interpretation. Include examples of how regression analysis can be applied to real-world problems in my industry.

[Background]: Provide context about your background, including your level of experience with statistics and your learning objectives.

[Industry]: Specify your area of interest or industry.

[Tools]: List the specific statistical tools you want to learn more about, such as ANOVA, factor analysis, or time series analysis.

[Application]: Describe how you plan to apply these statistical tools in your project or work.

Total Enterprise Value-WACC or APV

Master the calculation and interpretation of Total Enterprise Value using WACC or APV.

Prompt

[Action]: Provide a step-by-step guide on how to calculate Total Enterprise Value using both the WACC and APV methods. Include examples of how to interpret the results and make decisions based on the calculations.

[Background]: Share your background in finance and your familiarity with valuation concepts.

[Industry]: Specify the industry or sector you are focusing on for your project.

[Project Requirements]: Describe the specific requirements or constraints of your project that may influence the choice of valuation method.

[Comparison]: Request a comparison of the WACC and APV methods, and guidance on when to use each one based on your project's needs. (If needed)

IRR Analysis

Learn how to use Internal Rate of Return (IRR) analysis to evaluate investment opportunities.

Prompt

[Action]: Explain the concept of IRR and provide a step-by-step guide on how to calculate it. Include examples of how to use IRR analysis to compare and prioritize investment options.

[Experience]: Provide information about your level of experience with financial analysis. [Investment Considerations]: Describe the specific investment considerations for your project, such as time horizon, risk tolerance, and capital constraints. [Comparison]: Request guidance on how to use IRR analysis to compare and prioritize investment options. [Industry]: Specify the industry or sector you are focusing on for your project.

Valuation Methodologies-Discounted Cash Flow Analysis

Understand the principles and application of Discounted Cash Flow (DCF) analysis for valuation.

Prompt

[Action]: Provide a comprehensive overview of the DCF analysis methodology, including its key components, assumptions, and step-by-step process. Include examples of how to apply DCF analysis to value a company in my target industry for my project. [Project]: Describe your project [Project Constraints]: Describe the specific requirements or constraints of your project that may influence the application of DCF analysis. [Background]: Describe your background in valuation techniques and your familiarity with DCF analysis. [Industry]: Specify the industry or sector you are focusing on for your project. (if not covered previously) [Pitfalls]: Request guidance on common pitfalls to avoid when applying DCF analysis to your specific project.

Interactive Financial Model

Learn how to build and use interactive financial models for decision-making and analysis.

Prompt

[Action]: Provide a step-by-step guide on how to structure and build an interactive financial model in Excel. Include best practices for formatting, organization, and incorporating scenario and sensitivity analysis. [Experience]: Share your experience with financial modeling and your familiarity with different modeling techniques. [Objectives]: Describe the specific objectives of your project and how an interactive financial model will support decision-making. [Industry]: Specify the industry or sector you are focusing on for your project. [Presentation]: Request tips on how to present the findings of your interactive financial model effectively to stakeholders.

Real Option Valuation

Discover how to apply Real Option Valuation techniques to assess the value of flexibility in decision-making.

Prompt

[Action]: Explain the concept of Real Option Valuation and provide a step-by-step guide on how to identify, model, and value real options. Include examples of how to apply Real Option Valuation in the context of my project. [Background]: Provide context about your background in valuation and your familiarity with Real Option Valuation. [Decision-Making Requirements]: Describe the specific decision-making requirements of your project and how flexibility adds value. [Industry]: Specify the industry or sector you are focusing on for your project. [Application]: Request guidance on how to identify, model, and value real options in the context of your project.