value_stock_dcf

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

With no annotations provided, the description must fully disclose behavior. It explains the formula (EV = Σ[FCF/(1+WACC)^t] + Terminal Value, Equity = EV - Net Debt) and gives an example input format. However, it does not describe the output structure or any assumptions/limitations, though an output schema exists.

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 three sentences long, cleanly structured, and front-loaded with the tool's purpose. Every sentence adds value: naming the method, giving an input example, and stating the core formula.

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?

Given the existence of an output schema, the description is nearly complete. It covers the key inputs and the valuation formula but could briefly mention how net_debt and shares_outstanding affect the result (e.g., per-share equity). The tool has 5 parameters, but the description focuses on the most critical ones.

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?

Schema description coverage is 0%, so the description must add meaning. It clarifies the format for free_cash_flows_json with an example array. It also mentions WACC, terminal growth, and net debt through the formula. However, net_debt and shares_outstanding are not explicitly explained, though their roles are implied by the formula.

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 explicitly states 'Discounted Cash Flow (DCF) valuation', which is a specific verb+resource. It distinguishes this tool from sibling tools like value_stock_ddm, value_stock_pe, etc., which are alternative valuation methods.

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 implies that DCF is used for free cash flow based valuation, but it does not provide explicit guidance on when to use this tool versus alternatives like DDM or PE. No direct comparisons or exclusions are mentioned.

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