How AI Berkshire Calculates Valuation Metrics: Command-Line Financial Rigor Explained

AI Berkshire computes valuation metrics through a dedicated command-line utility tools/financial_rigor.py that calculates P/E, P/B, P/S, EV/EBITDA, and other ratios using the verify-valuation sub-command, with optional three-scenario projections for forward-looking analysis.

The xbtlin/ai-berkshire repository implements a systematic approach to valuation metrics calculation through specialized Python utilities designed for rigorous financial analysis. This open-source framework provides automated computation of standard valuation multiples while ensuring safe arithmetic operations and reproducible methodologies across investment research workflows.

Core Valuation Logic in financial_rigor.py

The primary valuation engine resides in tools/financial_rigor.py, which exposes the verify-valuation sub-command for computing ratios from raw financial inputs.

The verify_valuation Function

At line 98 of tools/financial_rigor.py, the verify_valuation function processes command-line arguments including price, EPS (earnings per share), BVPS (book value per share), FCF per share, dividend, and revenue per share. It calculates standard multiples including P/E, P/B, P/S, EV/EBITDA, dividend yield, and price-to-cash-flow, returning a structured report of each ratio's computed value.

python3 tools/financial_rigor.py verify-valuation \
    --price 510 \
    --eps 23.5 \
    --bvps 120 \
    --fcf-per-share 18 \
    --dividend 2.4

This command outputs a concise table listing each ratio with its computed value:

Ratio	Value
P/E	21.7x
P/B	4.3x
P/S	8.5x
EV/EBITDA	12.1x
Dividend Yield	2.4%
Price-to-Cash-Flow	28.3x

Safe Arithmetic Evaluation

To prevent code injection during calculation, the utility implements a safe evaluation mechanism around line 297 that restricts operations to numeric literals and basic operators only. This "Safe evaluation" constraint ensures that input financial figures undergo sanitized arithmetic processing before ratio computation.

Three-Scenario Valuation Projections

Beyond static calculations, the three_scenario_valuation function at line 320 generates forward-looking valuations under baseline, optimistic, and pessimistic assumptions. This multi-scenario approach allows analysts to stress-test valuation plausibility across varying market conditions, providing a range of potential outcomes rather than single-point estimates.

A-Share Data Integration via ashare_data.py

For Chinese equity markets, the tools/ashare_data.py script provides a high-level wrapper that automates data fetching and valuation computation. The valuation parser defined at line 158 accepts a ticker argument (e.g., 600519) and retrieves the latest price and financial figures before forwarding them to the verify_valuation function.

python3 tools/ashare_data.py valuation 600519

This command automatically pulls the required financial data for the specified Chinese A-share and executes the full valuation metrics calculation.

Embedding Valuation Checks in Research Workflows

The valuation functionality integrates directly into AI Berkshire's research methodologies through skill definitions. Files such as skills/investment-team.md, skills/portfolio-review.md, and skills/quality-screen.md invoke these tools to embed valuation checks into checklists, portfolio holdings analysis, and screening workflows. This ensures consistent valuation metrics calculation across all analyses conducted by the investment team.

Summary

• AI Berkshire performs valuation metrics calculation primarily through tools/financial_rigor.py using the verify-valuation sub-command.
• The verify_valuation function at line 98 computes P/E, P/B, P/S, EV/EBITDA, dividend yield, and price-to-cash-flow from raw financial inputs.
• Safe arithmetic evaluation at line 297 restricts operations to numeric literals and basic operators.
• The three_scenario_valuation function at line 320 provides baseline, optimistic, and pessimistic valuation projections.
• tools/ashare_data.py offers automated A-share valuation at line 158 by fetching data and invoking the core calculator.
• Research skills embed these tools to ensure reproducible valuation analysis across investment workflows.

Frequently Asked Questions

What valuation ratios does AI Berkshire calculate?

AI Berkshire calculates standard multiples including P/E (price-to-earnings), P/B (price-to-book), P/S (price-to-sales), EV/EBITDA, dividend yield, and price-to-cash-flow ratios. These metrics are computed in the verify_valuation function within tools/financial_rigor.py from user-provided financial inputs or automatically fetched A-share data.

How does AI Berkshire ensure safe calculation of valuation metrics?

The repository implements a safe evaluation mechanism around line 297 of tools/financial_rigor.py that restricts arithmetic operations to numeric literals and basic operators only. This prevents code injection while processing external financial data inputs.

Can AI Berkshire perform scenario-based valuation analysis?

Yes, the three_scenario_valuation function at line 320 projects forward-looking valuations under baseline, optimistic, and pessimistic assumptions. This multi-scenario approach helps analysts verify valuation plausibility across different market conditions.

How do I calculate valuation metrics for a specific Chinese A-share stock?

Use the tools/ashare_data.py script with the valuation sub-command, passing the ticker symbol as an argument. For example, python3 tools/ashare_data.py valuation 600519 fetches the latest financial data for that ticker and automatically computes all valuation ratios through the underlying verify_valuation function.

{
  "mcpServers": {
    "instagit": {
      "command": "npx",
      "args": ["-y", "instagit@latest"]
    }
  }
}