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valuation-api

by io.finance-tools.valuation

irr_sensitivity

Read-onlyIdempotent

Compute an IRR sensitivity grid across a range of exit multiples and hold periods for a single lump-sum investment. WHEN TO USE: to stress-test how the annualised return varies with exit multiple and holding period before committing to an investment. Complements calculate_irr. WHEN NOT TO USE: when you need one precise IRR for a known exit value (use calculate_irr), or a full valuation (use calculate_dcf). BEHAVIOUR: pure deterministic calculation — no side effects, no network or storage access; idempotent and non-destructive. NOTE ON GRID GEOMETRY: the byMultiple grid is computed at the SECOND hold period in hold_periods (default 5 years); the byHoldPeriod grid is computed at a 2.5x exit multiple. RETURNS: JSON object { byMultiple: { "2.0x": 14.9, ... } with IRR values as percentage numbers rounded to 1dp, byHoldPeriod: { "5y": 18.4, ... } }. PARAMETERS: initial_investment (number > 0), exit_multiples (optional array of numbers to test, default [1.5, 2.0, 2.5, 3.0, 3.5]), hold_periods (optional array of positive integers (years) to test, default [3, 5, 7, 10]).

Input Schema

TableJSON Schema
NameRequiredDescriptionDefault
hold_periodsNoHold periods in whole years to test, e.g. [3, 5, 7, 10]. Defaults to [3, 5, 7, 10].
exit_multiplesNoExit multiples to test, e.g. [2.0, 2.5, 3.0, 4.0, 5.0]. Defaults to [1.5, 2.0, 2.5, 3.0, 3.5].
initial_investmentYesAmount invested up front, in currency units, e.g. 100000. Must be positive.

Schema Changelog

Changes observed during successful MCP inspections. Dates show when Glama detected each change.

  1. First observed

TDQS

A4.5/5.0
Behavior4/5

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

Annotations already declare readOnlyHint, idempotentHint, and destructiveHint. The description adds value by explicitly stating 'pure deterministic calculation — no side effects, no network or storage access' and clarifies grid geometry (byMultiple uses second hold period, byHoldPeriod uses 2.5x), which is key behavioral information not in the schema. Minor redundancy with annotations but no contradiction.

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

Conciseness5/5

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

The description is organized into clear labeled sections, front-loads purpose, and every section earns its place. While it is longer than average, the complexity of the tool (grid geometry, return format, usage boundaries) justifies the length. The WHEN/WHEN NOT structure and RETURNS section make it highly scannable for an agent.

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

Completeness5/5

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

Given the tool has no output schema, the description fully compensates by documenting the return shape, rounding behavior, grid geometry, defaults, and side-effect profile. An agent has everything needed to call this tool correctly: parameters, defaults, output structure, and usage conditions. No critical gap remains.

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

Parameters3/5

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

Schema description coverage is 100%, so the schema already documents each parameter, including defaults and constraints. The description's PARAMETERS section mostly repeats what the schema provides (types, defaults, positivity). It adds no meaningful new parameter semantics beyond the schema, so the baseline 3 is appropriate.

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

Purpose5/5

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

The description opens with a specific verb and object: 'Compute an IRR sensitivity grid across a range of exit multiples and hold periods.' It immediately establishes the tool's scope (sensitivity analysis, single lump-sum investment) and clearly distinguishes it from calculate_irr, which computes a single IRR. This makes sibling differentiation trivial.

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

Usage Guidelines5/5

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

The description explicitly states WHEN TO USE ('stress-test how the annualised return varies... before committing to an investment'), WHEN NOT TO USE ('when you need one precise IRR'), and names the exact alternatives (calculate_irr, calculate_dcf). This is textbook usage guidance.

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

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TDQS

A4.6/5.0
Disambiguation5/5

Each tool maps to a distinct financial formula or calculation, and the when-to-use/when-not-to-use guidance cleanly separates closely related cash-flow metrics like NPV, IRR, and MOIC as well as CAPM, WACC, and DCF. There is no pair of tools that appears to perform the same operation.

Naming Consistency4/5

The overwhelming majority of tools follow a consistent calculate_<metric> snake_case pattern with descriptive names. irr_sensitivity breaks the pattern by omitting the calculate_ prefix, and mixing expanded names like cost_of_equity with abbreviations like wacc and moic is a minor deviation.

Tool Count5/5

Twelve tools is well within the ideal range for a focused financial-calculations server. Each tool covers a distinct valuation, discount-rate, or return-metric need without redundancy, so the count feels appropriately scoped.

Completeness4/5

The tool set covers the core valuation workflow: cost of equity, beta unlevering/relevering, WACC, DCF, enterprise-value multiples, and investment return metrics. It lacks a reverse equity-value calculation and an equity-side multiple like P/E, but those are workable gaps rather than severe dead ends.

Resources