Does the description disclose side effects, auth requirements, rate limits, or destructive behavior?

Annotations already declare readOnlyHint=true, idempotentHint=true, and destructiveHint=false, so the safety profile is covered. The description adds that it returns a valuation range with sensitivity analysis, which is useful output context. However, it does not disclose any additional behavioral traits such as data dependencies or performance characteristics, but this is minor given the read-only nature.

Agents need to know what a tool does to the world before calling it. Descriptions should go beyond structured annotations to explain consequences.

Is the description appropriately sized, front-loaded, and free of redundancy?

The description is a single sentence that front-loads the action and then provides the key inputs and output. It is concise but packs essential information without unnecessary fluff.

Shorter descriptions cost fewer tokens and are easier for agents to parse. Every sentence should earn its place.

Given the tool's complexity, does the description cover enough for an agent to succeed on first attempt?

For a tool with one optional parameter and an output schema present, the description is sufficient. It states the inputs (P&L, growth, margin, MER, risk) and the output (valuation range with sensitivity analysis). No prerequisites or error conditions are mentioned, but given its simplicity and read-only nature, this is not a critical gap.

Complex tools with many parameters or behaviors need more documentation. Simple tools need less. This dimension scales expectations accordingly.

Does the description clarify parameter syntax, constraints, interactions, or defaults beyond what the schema provides?

The schema description for lookback_months is very detailed, explaining the mode switch (6 vs 12 months) and matching the dashboard. Since schema coverage is 100% and the parameter is well-documented, the description does not need to add more. The baseline of 3 is appropriate because the schema does the heavy lifting.

Input schemas describe structure but not intent. Descriptions should explain non-obvious parameter relationships and valid value ranges.

Does the description clearly state what the tool does and how it differs from similar tools?

The description clearly states the tool runs an SDE-multiple business valuation based on specific factors (P&L, growth, margin, MER, risk) and returns a valuation range with sensitivity analysis. It uses a specific verb (run) and resource (business valuation), and is distinct from siblings like run_inventory_valuation.

Agents choose between tools based on descriptions. A clear purpose with a specific verb and resource helps agents select the right tool.

Does the description explain when to use this tool, when not to, or what alternatives exist?

The description provides clear context on what the tool does and the basis of the valuation, but does not explicitly mention when to use it over alternatives or any exclusions. Given the tool is the only business valuation tool in the sibling list, the lack of explicit alternatives is acceptable.

Agents often have multiple tools that could apply. Explicit usage guidance like "use X instead of Y when Z" prevents misuse.