calculate_dcf

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

With no annotations, the description carries the behavioral burden, and it does state the result and the method. However, it is thin on details such as how terminal growth is handled, especially since the visible schema does not include a terminal-growth-rate parameter, leaving some ambiguity about the actual computation.

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?

One sentence, front-loaded with the action and result, with no filler or redundant restatement of the schema. Every word earns its place.

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 calculation tool with an output schema, the description need not explain return values, but it leaves two material gaps: it gives no usage/exclusion guidance versus sibling valuation tools, and it mentions terminal-growth DCF without a corresponding terminal-growth parameter in the visible schema. This makes the definition adequate but incomplete for confident autonomous invocation.

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 top-level schema description coverage is high, so the baseline is 3 even without per-parameter prose in the tool description. The output terms 'enterprise' and 'per-share' hint at the roles of net_debt and shares_outstanding, but the description adds no explicit guidance on the required free_cash_flows array or discount_rate semantics beyond what the schema already encodes.

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 names a specific verb (calculate), a specific resource/method (terminal-growth DCF), and the exact outputs (enterprise, equity, and per-share value). This makes it easy to distinguish from siblings like calculate_wacc and dcf_sensitivity, even before opening the schema.

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?

No when-to-use or when-not-to-use guidance is provided. There is no mention of alternatives such as dcf_sensitivity for scenario analysis, project_financials for projected cash flows, or calculate_wacc for the discount rate, so an agent must infer usage from the name and sibling list.

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