LLMs for Automatic Financial Statement Analysis

Financial Accounting provides standards for the recording and valuation of economic elements, facilitating the representation of financial activity in standardized models called Financial Statements, such as the Balance Sheet or the Income Statement. Financial Statements are analyzed using different techniques, including the use of ratios or indicators that reveal vital information for understanding, controlling, and planning the financial management of an organization. While it is feasible to achieve a certain degree of automation in Financial Statement Analysis, especially in the computation of financial ratios, human intervention remains essential to extract conclusions that serve as the basis for decision-making. This exploratory study aims to automate the analysis process through the employment of Large Language Models. Leveraging Financial Statements and indicators calculated automatically as the base knowledge, this study applies these language models to autonomously generate an understandable Financial Statement Analysis.