Can Large language model analyze financial statements well?

Xinlin Wang, Mats Brorsson


Abstract
Since GPT-3.5’s release, large language models (LLMs) have made significant advancements, including in financial analysis. However, their effectiveness in financial calculations and predictions is still uncertain. This study examines LLMs’ ability to analyze financial reports, focusing on three questions: their accuracy in calculating financial ratios, the use of these metrics in DuPont analysis and the Z-score model for bankruptcy prediction, and their effectiveness in predicting financial indicators with limited knowledge. We used various methods, including zero-shot and few-shot learning, retrieval-augmented generation (RAG), and fine-tuning, in three advanced LLMs and compared their outputs to ground truth and expert predictions to assess their calculation and predictive abilities. The results highlight both the potential and limitations of LLMs in processing numerical data and performing complex financial analyses.
Anthology ID:
2025.finnlp-1.19
Volume:
Proceedings of the Joint Workshop of the 9th Financial Technology and Natural Language Processing (FinNLP), the 6th Financial Narrative Processing (FNP), and the 1st Workshop on Large Language Models for Finance and Legal (LLMFinLegal)
Month:
January
Year:
2025
Address:
Abu Dhabi, UAE
Editors:
Chung-Chi Chen, Antonio Moreno-Sandoval, Jimin Huang, Qianqian Xie, Sophia Ananiadou, Hsin-Hsi Chen
Venues:
FinNLP | WS
SIG:
Publisher:
Association for Computational Linguistics
Note:
Pages:
196–206
Language:
URL:
https://aclanthology.org/2025.finnlp-1.19/
DOI:
Bibkey:
Cite (ACL):
Xinlin Wang and Mats Brorsson. 2025. Can Large language model analyze financial statements well?. In Proceedings of the Joint Workshop of the 9th Financial Technology and Natural Language Processing (FinNLP), the 6th Financial Narrative Processing (FNP), and the 1st Workshop on Large Language Models for Finance and Legal (LLMFinLegal), pages 196–206, Abu Dhabi, UAE. Association for Computational Linguistics.
Cite (Informal):
Can Large language model analyze financial statements well? (Wang & Brorsson, FinNLP 2025)
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PDF:
https://aclanthology.org/2025.finnlp-1.19.pdf