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The Accounting Podcast cover image

ChatGPT Beats Humans at Financial Statement Analysis

The Accounting Podcast

NOTE

AI vs Human Financial Analysts in Predicting Company Earnings

A study by the University of Chicago's Booth School of Business revealed that a chat GPT model predicted changes in company earnings with over 60% accuracy, surpassing human analysts who achieved just under 53% accuracy. Financial statement analysis is crucial for investors to forecast future earnings based on historical information and notes. Analyzing financial statements is laborious for humans, involving extensive data collection, trend analysis, and calculations. AI's ability to translate information from one format to another and apply chain of thought prompting enhances its analytical capabilities, outperforming human analysts. While AI may not replace human financial analysts, it significantly boosts productivity, allowing one analyst to process multiple financial statements efficiently.

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