Long term business success is based on four principles:
- Financial analysis must happen at the most granular level of finance – the single financial contract: Profitability and risk allocation or flexible regulatory reporting is only possible if analysis happens at the granular level of a single contract. This allows aggregation on any level: portfolio, department or enterprise.
- Financial analysis must include a going concern perspective: While many types of analysis – including much of regulatory reporting – are based on a liquidation view, real life and real business is a going concern. This must be reflected in the analysis.
- Financial analysis must integrate all types of risks including strategic and business risk: All risks affect the same expected cash flows. Any separation is artificial and distorts understanding and the real effects on the bottom line.
- The basis of finance is cash flow: Value and income must be derived from cash-flow and not vice versa.
Combining the single contract level and the going concern perspective demands high end financial simulation tools that combine elements such as big data technology, parallel processing, analysis specific aggregation and so on. Our cutting-edge tools are built on 30 years of quality software development experience.
Our simulation methods integrate market, counter-party and operational aspects of the firm while forecasting value of the firm. All our analytics, including the going concern perspective is purely cash-flow based. We use a unique cash flow approach by transforming industry data into cash basis for business analysis, from where we derive consistently value and income measured under different valuation and accounting regimes (Nominal, Fair Value, IFRS, Local GAAP).