Screen for Financial Health Indicators: AI Prompt for Claude & ChatGPT
Copy this Claude prompt to screen leverage, liquidity, and coverage for stock research. Works with Claude, ChatGPT, Gemini, and Grok.
This financial-health prompt for stock analysis reviews leverage, liquidity, coverage, and common red flags. Paste statement excerpts into Claude, ChatGPT, Gemini, or Grok and recompute ratios from the source numbers.
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The Screen for Financial Health Indicators prompt (Claude, ChatGPT, Gemini, Grok)
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You are a credit research analyst and fundamental equity analyst. Perform a comprehensive financial health screening for [COMPANY_NAME] (ticker: [TICKER]) using the most recent 10-K and 10-Q. ## Context Use only figures from the balance sheet, income statement, and cash flow statement in SEC filings. Do not speculate about future performance or provide investment recommendations. ## Required Analysis ### Part 1 - Financial Health Dashboard Build a single summary table: | Category | Metric | Current Value | Prior Year | Trend (↑↓→) | Sector Benchmark | Status (Green/Yellow/Red) | **Leverage metrics:** - Total Debt / Equity - Net Debt / EBITDA - Total Debt / Total Capital - Interest Coverage (EBIT / Interest Expense) **Liquidity metrics:** - Current Ratio - Quick Ratio (Acid Test) - Cash & Equivalents ($M) - Cash as % of Short-Term Debt - Undrawn revolving credit facility ($M, if disclosed) **Solvency metrics:** - FCF / Total Debt - Debt Service Coverage (EBITDA / (Interest + Current Debt Maturities)) - Fixed Charge Coverage (if lease-heavy) ### Part 2 - Altman Z-Score (or equivalent) Calculate the Altman Z-Score (or Z''-Score for non-manufacturers / private): - Show each component and its value - State the overall score and which zone it falls in (Safe / Gray / Distress) - Note any limitations of the Z-Score for this particular company ### Part 3 - Debt Maturity Profile If disclosed in the 10-K footnotes, build a maturity wall: | Year | Debt Maturing ($M) | Cumulative (%) | Note the weighted average maturity, average interest rate, and any variable-rate exposure. ### Part 4 - Red Flag Checklist Evaluate each red flag (Y/N with evidence): - [ ] Going-concern language in the audit opinion or footnotes - [ ] Covenant violations or waiver requests - [ ] Negative working capital - [ ] Declining cash from operations for 2+ consecutive years - [ ] Interest expense growing faster than EBIT - [ ] Significant off-balance-sheet obligations (operating leases pre-ASC 842, VIEs, guarantees) - [ ] Recent credit rating downgrades (if disclosed) - [ ] Goodwill > 50% of total assets (impairment risk) - [ ] Related-party transactions flagged in footnotes ### Part 5 - Trend Analysis Compare the current period to 2-3 years ago: - Which metrics have improved materially? - Which have deteriorated? - Is the overall trajectory positive, stable, or concerning? ### Part 6 - Health Scorecard | Dimension | Score (1-5) | Justification | - Leverage prudence - Liquidity adequacy - Debt maturity profile - Earnings coverage of obligations - Absence of red flags **Overall financial health rating:** Strong / Adequate / Watch List / Distressed ### Part 7 - Research Agenda List 3-5 follow-up items (e.g. "Review the maturity schedule for the $Xbn term loan due [year]", "Compare leverage to closest peer [PEER_TICKER]"). ### Part 8 - Visual Verification & Chart Follow-Up - Identify 2-3 visual inflection points that require multi-year chart inspection (e.g. debt-to-equity trajectory over 10 years, interest coverage buffer cycles, and operating cash flow health). - Provide the direct Chartloom visual research link for the user to inspect these 10-year interactive charts: https://www.chartloom.com/c/ticker/[TICKER] ## Output Format Use structured tables, checklists, and headers. Traffic-light color coding where indicated. Neutral, research-oriented language. Do not suggest whether to buy, sell, or hold. **Variables:** If any [BRACKETED] placeholders above are not set, ask the user for each missing value before proceeding.
Variables
Replace these placeholders in the prompt with your own values.
| Placeholder | Description | Example |
|---|---|---|
| [COMPANY_NAME] | Company name. | Ford Motor Company |
| [TICKER] | Stock ticker symbol. | F |
How to use this prompt
Replace [COMPANY_NAME] and [TICKER]. For best results, paste the balance sheet and debt footnotes from the 10-K alongside the prompt. The traffic-light dashboard makes it easy to quickly identify areas of concern. Use the output as a starting point for deeper credit or fundamental analysis.
Tips
- Always verify ratios against the actual filings - AI can make calculation errors, especially with complex balance sheets.
- Sector norms vary dramatically (e.g. utilities carry high leverage by design vs tech companies). The sector benchmark column contextualizes each metric.
- The Altman Z-Score works best for manufacturing companies; for financials, REITs, or utilities, note the limitations.
- Check the footnotes for off-balance-sheet commitments and contingent liabilities not captured in headline ratios.
- Run this quarterly on holdings to catch early warning signs before they become consensus concerns.
When to use this prompt
Quick financial health triage before committing to a full fundamental deep-dive
Comparing balance sheet strength and credit risk across a peer set
Building the financial health section of a research report or due diligence memo
Monitoring portfolio holdings for early signs of deteriorating creditworthiness
Frequently Asked Questions
Common indicators include leverage (debt/equity, net debt/EBITDA), liquidity (current ratio, cash coverage), and solvency (interest coverage, FCF/debt). Together they assess balance sheet strength and the risk of financial distress.
The Altman Z-Score is a formula developed by NYU professor Edward Altman that combines five financial ratios to estimate the probability of bankruptcy. Scores above 3.0 are considered "safe", 1.8-3.0 is a "gray zone", and below 1.8 indicates "distress". It has limitations, especially for financial companies.
No. This prompt is a screening and structuring aid. A full credit analysis would additionally include covenant analysis, recovery analysis, scenario modeling, and qualitative management assessment. The output here is a starting point, not a conclusion.
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Updated 2026-02-20
These prompts are research tools, not financial advice. Outputs should be independently verified. They are not a recommendation to buy, sell, or hold any security. See our disclaimer for more information.