Some formulas and calculations may be wrong

#1
by Frank72454 - opened

I've been testing this model with real data and against other AI models, and it gives wrong answers at least with Discount Rate Models and Annual EPS, so be careful with it.

Here is the feedback generated for it:

Feedback on AI-Generated Financial Analysis

General Assessment

The AI-generated analysis demonstrates both capabilities and significant limitations when attempting complex financial valuation tasks. While it shows awareness of fundamental valuation concepts, the implementation reveals several critical flaws that would mislead an investor relying on its conclusions.

Strengths Observed

  • The model attempts to apply a systematic approach to valuation
  • It correctly identifies the need for key financial inputs (growth rates, margins, etc.)
  • It recognizes the concept of discounting future cash flows
  • It acknowledges that simplifications were made in its approach

Areas for Improvement

Conceptual Understanding

  • The analysis demonstrates fundamental confusion about financial relationships and formulas
  • There's a misunderstanding of how different financial metrics relate to each other
  • The model appears to create plausible-sounding but mathematically incoherent calculations

Mathematical Precision

  • The calculations contain logical inconsistencies that would be obvious to someone with financial training
  • The model mixes different units of measurement inappropriately
  • Discounting methodology is incorrectly applied

Context Awareness

  • The model fails to recognize when its outputs don't make practical sense in context
  • It doesn't properly distinguish between company-wide metrics and per-share values
  • It appears to prioritize producing a specific format of answer over ensuring logical coherence

Self-Assessment Capability

  • While the model includes a disclaimer about simplifications, it doesn't identify the fundamental errors in its approach
  • This suggests limited ability to verify its own work or recognize when its outputs are problematic

Broader Implications

This example highlights important considerations when using AI for financial analysis:

  1. AI-generated financial valuations should be carefully verified by someone with domain expertise
  2. Models may produce outputs that appear sophisticated but contain fundamental flaws
  3. The confidence with which information is presented can mask underlying errors
  4. For critical financial decisions, AI outputs should be considered starting points for analysis, not definitive conclusions

While AI has potential to assist with financial analysis, this example demonstrates the importance of human oversight, especially for complex valuation tasks where errors could lead to significant financial consequences.

hi, thank you, but I am not the creator of that model, I just quantized this model. it is an informative insight, but I think that should go to the original model's page if it still exists

Sign up or log in to comment