ChatGPT is an advanced chatbot designed to generate text responses based on user input, leveraging its extensive training on a vast dataset. Its capabilities extend to diverse tasks such as crafting articles on a wide range of subjects, explaining the interconnections and cause-effect relationships between different phenomena, and providing suggestions for both questions and answers in the realm of knowledge-based inquiries. However, due to its nature, ChatGPT is not proficient in solving mathematical problems. Consequently, it cannot effectively replace the role of tools like Excel or generate numeric forecasts. Nevertheless, it remains a valuable resource for learning and information-gathering purposes.

Financial analysts value companies by creating cash flow forecasts and estimating appropriate discount rates. To execute this task effectively, analysts must fulfill several crucial responsibilities. These include, but not limited to, comprehending the key performance indicators (KPIs) relevant to the industry, gaining a deep understanding of the various factors that influence these KPIs, familiarizing themselves with the historical and current developments and strategies of the company under evaluation, evaluating the quality of the company and its standing in the market, and assessing the diverse risk factors associated with the company.

To accomplish these objectives, analysts rely on a comprehensive information-gathering process. They engage in consultations with the management teams of the target company and other organizations within the market, seek insights from industry experts, and peruse articles and news available on the internet. This multifaceted approach ensures a thorough understanding of the industry and the company, enabling analysts to make informed evaluations and produce forecasts.

ChatGPT proves to be a valuable aid in performing these tasks through the following means:

  1. Providing direct information: ChatGPT possesses a vast amount of knowledge across various domains, allowing it to offer direct information relevant to company valuation. 
  2. Explaining the effects of events or situations: ChatGPT’s ability to understand cause-effect relationships enables it to elucidate the impacts of specific events or situations on a company’s valuation. By leveraging its comprehensive training, ChatGPT can analyze and clarify how certain factors influence key financial indicators and overall company performance.
  3. Assisting in formulating questions for management and industry experts: ChatGPT can assist users in formulating well-structured and insightful questions to pose to management teams and industry experts.
  4. Help improve texts and wording: My English is far from perfect, so I wrote this article and asked ChatGPT to improve it. You see the result below.

Let’s explore several examples within the context of the commercial real estate industry. Of course, these questions can be adapted to suit any industry or company:

  1. What are the key performance indicators (KPIs) specific to the commercial real estate industry?
  2. What factors influence the rental rates of office buildings?
  3. Which segment of the office building market would be most susceptible to the impact of oversupply?
  4. If the commercial office market in New York experiences a significant decrease in demand, how would it necessitate adjustments to the revenue forecast for a company that owns office buildings in that region? Additionally, how should this situation affect the discount rate applied to the cash flow?
  5. As part of a financial analysis, what are the essential inquiries to pose to the management of a commercial real estate company?
  6. While conducting a management interview, could you assist me in formulating questions to comprehend the current market conditions of the commercial office real estate sector?
  7. During a management interview with a commercial office real estate company, could you help me formulate questions to assess if the company is facing challenges with any of its office buildings?
  8. What different strategies do commercial real estate companies employ?
  9. What happened the last time, prior to 2020, when vacancy rates of office building increased?
  10. In the commercial real estate market, what factors could lead to an increase in rental rates while simultaneously increasing vacancy rates?

These examples provide a starting point for inquiry and discussion, and they can be tailored to suit specific industry or company scenarios.

Certainly, you have the flexibility to utilize the answers provided by ChatGPT as a basis for formulating additional questions. Moreover, you can request ChatGPT to elaborate on specific aspects of its responses. 

The following prompts can prove useful in this context:

  1. When conducting financial analysis or valuation, what key inquiries should I pose to X in order to gain a comprehensive understanding of Y?
  2. Given the current market situation of X, how might it impact Y in the future?
  3. What essential factors should I be aware of when analyzing X?
  4. What are the primary influences on X?
  5. What factors might contribute to the occurrence of both X and Y?
  6. What happened prior to 2020 when X?

By incorporating these prompts, you can leverage ChatGPT’s knowledge and insights to facilitate your learning, analysis, and exploration of various subjects. While it’s a powerful tool, you should keep in mind that the answers are not always correct, and you shouldn’t rely solely on the information provided by ChatGPT and alike.