Use Case | Investment Proposal Evaluation in the Financial Area

Use Case: Investment Proposal Evaluation in the Financial Area

General Description:

In the financial sector, evaluating investment proposals requires a thorough analysis of risks, projected returns, and other key indicators. This generative model allows the analysis and comparison of investment proposals, highlighting strengths, weaknesses, risks, and opportunities. Working with documents in PDF format, the model extracts key data, generates summaries, and classifies proposals based on their alignment with the organization’s financial goals.

How It Works:

1. Uploading Investment Proposals:
   • Users upload PDF documents containing information such as revenue projections, identified risks, business plans, and financial terms.
2. Extraction of Key Data:
   • The model analyzes each proposal to identify:
     • Return on Investment (ROI).
     • Payback periods.
     • Financial, legal, and market risks.
     • Performance indicators like EBITDA and profit margins.
3. Comparative Analysis:
   • It compares proposals based on key metrics such as:
     • Projected performance versus initial investment.
     • Risk levels and proposed mitigations.
     • Growth potential and alignment with the financial strategy.
4. Report Generation:
   • It provides a clear and structured report that includes:
     • Summaries of each proposal.
     • Direct comparisons of key metrics.
     • Recommendations on the most viable proposals and risks to consider.

Practical Example:

Scenario: An investment fund receives three proposals to finance projects in the technology, real estate, and renewable energy sectors.

Process with the Model:

1. Uploading the Proposals:
   • Analysts upload PDF documents containing business plans and financial projections.
2. Analysis and Comparison:
   • Extracts key data from the proposals:
     • Proposal 1 (Technology):
       • ROI: 15% annually.
       • Payback Period: 5 years.
       • Risk: High (volatile market).
     • Proposal 2 (Real Estate):
       • ROI: 10% annually.
       • Payback Period: 7 years.
       • Risk: Low (stable market).
     • Proposal 3 (Renewable Energy):
       • ROI: 20% annually.
       • Payback Period: 4 years.
       • Risk: Medium (regulatory concerns).
3. Report Generation:
   • Report Summary:
     • Proposal 1: High return but higher risk due to market volatility.
     • Proposal 2: Lower return but safer and more stable.
     • Proposal 3: High return with moderate risks related to regulatory changes.
   • Recommendations:
     • Prioritize Proposal 3 due to its balance between ROI, payback period, and moderate risk.

Benefits of the Model in Investment Proposal Evaluation:

1. Automated Analysis:
   • It analyzes large volumes of proposals quickly, reducing the manual workload for the financial team.
2. Clear and Structured Comparison:
   • It presents direct comparisons between the key metrics of each proposal, facilitating decision-making.
3. Identification of Risks and Opportunities:
   • It highlights financial and operational risks as well as potential growth opportunities.
4. Generation of Customized Reports:
   • It provides clear summaries and recommendations aligned with the organization’s financial goals.
5. Scalability and Multilingual Capabilities:
   • It can analyze proposals in over 80 languages, making it ideal for international funds or global companies.

Additional Applications:

1. Selection of High-Impact Projects:
   • Identifies proposals with the highest potential for financial and social impact.
2. Startup Evaluation:
   • Analyzes business plans and financial projections to identify promising startups.
3. International Investments:
   • Translates and evaluates investment proposals from different global markets.
4. Portfolio Optimization:
   • Compares investment opportunities to diversify and optimize financial portfolios.
5. Auditing of Existing Investments:
   • Reviews ongoing projects to assess their performance against initial projections.

Practical Example:

Additional Scenario: An investment bank evaluates proposals from three companies to finance projects in Latin America.

Without the Model:

• Manually reviewing and comparing each proposal takes weeks and increases the risk of errors or biases in the evaluation.

With the Model:

• It automatically translates and analyzes the proposals:
  • Proposal 1 (Company A): Estimated ROI: 18%, payback in 6 years, moderate risk.
  • Proposal 2 (Company B): Estimated ROI: 12%, payback in 8 years, low risk.
  • Proposal 3 (Company C): Estimated ROI: 25%, payback in 5 years, high risk.
• It generates a report that ranks the proposals based on their feasibility:
  • Recommends Proposal 1 as the most balanced option between return and risk.

Conclusion: Investment proposal evaluation through this model ensures that financial decisions are based on objective and structured analysis. Its ability to analyze, compare, and generate detailed reports makes it an indispensable tool for financial institutions, investment funds, and companies looking to maximize returns and minimize risks. Ideal for investment processes in competitive and globalized markets.