> ## Documentation Index
> Fetch the complete documentation index at: https://sheets-docs.elkar.co/llms.txt
> Use this file to discover all available pages before exploring further.

# How to Write Effective Prompts

> Writing effective prompts is the key to great results. The more precise you are, the better the output gets! Let’s explore how to write prompts that get the most out of Elkar.

## **Power Prompting Key Principles**

**Specific financial context** gets you better models. Elkar understands finance - use the right terminology and be precise about your assumptions.

<CardGroup cols={2}>
  <Card title="Structure First" icon="clipboard-list-check">
    **Define the model framework** before diving into calculations
  </Card>

  <Card title="Layer Complexity" icon="layer-group">
    **Build step-by-step** rather than asking for everything at once
  </Card>

  <Card title="State Assumptions" icon="network-wired">
    **Be explicit** about your financial assumptions and methodology
  </Card>

  <Card title="Format intentionally" icon="sparkles">
    **Be precise** about layout, colors, and structure to guide the AI toward a professional result
  </Card>
</CardGroup>

<Card title=" Iterate and Refine" icon="sparkles">
  If a response isn’t exactly what you wanted. Keep refining your prompt with more details. Elkar’s chat is designed to help you iterate. Ask for clarifications, tweaks, or new directions anytime!
</Card>

## Good vs. Bad Financial Prompts

<Tabs>
  <Tab title="DCF Models">
    ❌ **Vague:** *"Build a DCF model"*

    ✅ **Specific:** *"Build a 5-year DCF model for a SaaS company with current revenue of \$50M, 25% growth rate declining to 15%, and 20% EBITDA margins expanding to 30%"*

    **Why it works:** Timeframe, company type, key assumptions, growth trajectory
  </Tab>

  <Tab title="Forecasting">
    ❌ **Generic:** *"Create a revenue forecast"*

    ✅ **Detailed:** *"Build bottom-up revenue forecast: 1,000 customers growing 15% annually, average price \$5,000 increasing 3% yearly, churn rate 8%"*

    **Why it works:** Unit economics, growth drivers, specific metrics
  </Tab>

  <Tab title="Valuation">
    ❌ **Unclear:** *"Value this company"*

    ✅ **Precise:** *"Create comparable company analysis with EV/Revenue, EV/EBITDA, P/E multiples for software companies with 100M revenue"*

    **Why it works:** Methodology, metrics, peer group definition
  </Tab>

  <Tab title="LBO">
    ❌ **Too broad:** *"Create an LBO model"*

    ✅ **Comprehensive:** *"Build LBO model: \$100M purchase price, 60% debt at 7% interest, 5-year hold period, exit at 10x EBITDA, target 25% IRR"*

    **Why it works:** Purchase price, leverage ratio, debt terms, hold period, exit assumptions, return targets
  </Tab>

  <Tab title="M&A">
    ❌ **Ambiguous:** *"Analyze this merger"*

    ✅ **Structured:** *"Create accretion/dilution analysis: acquirer at 20x P/E, target at 15x P/E, 30% cash/70% stock deal, \$50M synergies over 3 years"*

    **Why it works:** Deal structure, valuation multiples, consideration mix, synergy assumptions, timeline
  </Tab>
</Tabs>

### Use Financial Terminology

<CardGroup cols={2}>
  <Card title="Margins & Growth" icon="arrow-up-right-dots">
    ✅ *"EBITDA margins expanding 200bps annually"*

    ✅ *"Net working capital as % of revenue"*
  </Card>

  <Card title="Valuation & Returns" icon="dollar-sign">
    ✅ *"Terminal value using exit multiple of 12x EBITDA"*

    ✅ *"WACC of 10% with 30% debt/equity ratio"*
  </Card>
</CardGroup>

<Tip>
  **Pro tip:** Start simple with core assumptions, then layer in complexity. Each prompt should build on the previous structure.
</Tip>

## Live Demo: Building a DCF

<iframe className="w-full aspect-video rounded-xl" src="https://www.youtube.com/embed/QH1dVbFvgks?autoplay=1&mute=1=1&loop=1&playlist=QH1dVbFvgks" frameBorder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowFullScreen />

### **Get Advanced DCF Prompt**

Build a full, professional-grade DCF model for a SaaS company with monthly forecasts over 2 years. Include detailed assumptions (subscription revenue by cohort, churn, CAC, headcount ramp, salaries, margins, taxes, capex, working capital). Structure the model across cleanly separated sheets: Inputs, Monthly Forecast, Free Cash Flow, Valuation (with both perpetuity and exit multiple), Sensitivity Analysis, and a Summary Dashboard with charts (FCF, valuation waterfall, CAC payback). Format using standard financial modeling best practices: clean layout, blue input cells, consistent formatting, borders, and named ranges. Include transparent formulas, dynamic links to Inputs, and annotate key calculations for clarity like in investment banking models

## Quick Reference

<AccordionGroup>
  <Accordion title="Essential Financial Terms">
    * **EBITDA** - Earnings before interest, taxes, depreciation, amortization
    * **WACC** - Weighted average cost of capital
    * **FCF** - Free cash flow (operating cash flow minus capex)
    * **LTV/CAC** - Lifetime value to customer acquisition cost ratio
    * **ARR** - Annual recurring revenue
  </Accordion>

  <Accordion title="Model Structure Best Practices">
    * **Blue cells** for inputs and assumptions
    * **Black cells** for calculations
    * **Separate sheets** for inputs, calculations, outputs
    * **Named ranges** for key variables
    * **Consistent formatting** throughout
  </Accordion>
</AccordionGroup>

***

## Ready to try ? Let's share our tips!

Start with a simple DCF prompt above, then join our [Discord community](https://discord.gg/k89v3cF6fX) to learn advanced techniques from finance professionals!