Methods and systems for quantifying cash flow recovery and risk

• US 20020049653A1
• Filed: 12/14/2000
• Published: 04/25/2002
• Est. Priority Date: 12/30/1999
• Status: Active Grant

• Current Assignee: General Electric Company
• Original Assignee: GE Corporate Financial Services, Inc. (General Electric Company)
• Inventors: Midkiff, Catherine Lynn, Messmer, Richard Paul, Johnson, Christopher Donald, Keyes, Tim Kerry, Chen, Yu-to, Pisupati, Chandrasekhar, Spencer, David Jonathan
• Granted Patent: US 7,162,445 B2
• Time in Patent Office: Days
• US Class Current: 705/35
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/03 Credit; Loans; Processing thereof
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange
• CPC Class Codes: G06Q 40/08 Insurance

Abstract

A method of valuation of large groups of assets by selecting a lowest variation assumption for asset valuation in order to limit risk includes the steps of evaluating assets by all known valuation methodologies which have merit for those particular assets, selecting the valuation methodology which is most accurate for the assets being evaluated and assigning values to the assets. Individual asset values are developed and listed in tables so that individual asset values can be taken from the tables and grouped in any desired manner. The asset s are divided into categories by credit variable and then rated individually.

Claims

1. A method for selecting a lowest variation assumption for asset valuation in order to limit risk, said method comprising the steps of:

evaluating assets utilizing multiple valuation methodologies which have merit for those particular assets;

selecting one of the valuation methodologies which is most accurate for the assets being evaluated; and

assigning values to the assets using the selected methodology.

2. A method according to claim 1 wherein said step of selecting the valuation methodology further comprises the step of ranking the valuation methodologies in order of accuracy in quantifying an objective, such as cash flow forecast.

3. A method according to claim 2 further comprising the step of selecting a valuation with at least one of minimum downside variances and maximum upside variances.

4. A method according to claim 1 wherein said step of selecting the valuation methodology further comprises the step of discontinuing selection of alternate valuations by remaining valuation methodologies when a best valuation methodology has been found.

5. A method according to claim 1 wherein said step of assigning values to the assets further comprises the step of finding a best probability distribution shape for the asset valuations.

6. A method according to claim 5 wherein said step of finding a best probability distribution shape for the asset valuations further comprises the step of reducing probability distribution variances.

7. A method according to claim 5 wherein said step of finding a best probability distribution shape for the asset valuations further comprises the step of providing capability to establish probability distributions.

8. A method according to claim 5 wherein said step of finding a best probability distribution shape for the asset valuations further comprises the step of providing a best notion of value at any point in the valuation process.

9. A method according to claim 1 wherein said step of evaluating assets by all known valuation methodologies which have merit for those particular assets further comprises the step of evaluating assets according to at least one of a 100% cash in hand valuation for the asset, partial cash in hand valuation for the asset, a direct underwriting of the asset and an inferred underwriting of the asset.

10. A portfolio valuation system for selecting a lowest variation assumption for asset valuation in order to limit risk, said system comprising:

a computer configured as a server and further configured with a database of asset portfolios;

at least one client system connected to said server through a network, said server configured to evaluate assets utilizing multiple valuation methodologies which have merit for those particular assets, select the valuation methodology which is most accurate for the assets being evaluated and assign values to the assets.

11. A system according to claim 10 wherein said server configured to rank the valuation methodologies in order of accuracy in quantifying cash flow.

12. A system according to claim 11 wherein said server configured to select a valuation with at least one of minimum downside variances and maximum upside variances.

13. A system according to claim 10 wherein said server configured to stop selecting remaining valuation methodologies when a best valuation methodology has been found.

14. A system according to claim 10 wherein said server configured to find a best probability distribution shape for the asset valuations.

15. A system according to claim 14 wherein said server configured to reduce probability distribution variances.

16. A system according to claim 14 wherein said server configured to provide capability to establish probability distributions.

17. A system according to claim 14 wherein said server configured to provide a best notion of value at any point in the valuation process.

18. A system according to claim 10 wherein said server configured to evaluate assets according to at least one of a 100% cash in hand valuation for the asset, partial cash in hand valuation for the asset, a direct underwriting of the asset and an inferred underwriting of the asset.

20. A computer according to claim 19 programmed to rank the valuation methodologies in order of accuracy in quantifying cash flow.

21. A computer according to claim 20 programmed to select a valuation with at least one of minimum downside variances and maximum upside variances.

22. A computer according to claim 19 programmed to stop selecting remaining valuation methodologies when a best valuation methodology has been found.

23. A computer according to claim 19 programmed to find a best probability distribution shape for the asset valuations.

24. A computer according to claim 23 programmed to reduce probability distribution variances.

25. A computer according to claim 23 programmed to provide capability to establish probability distributions.

26. A computer according to claim 23 programmed to provide a best notion of value at any point in the valuation process.

27. A computer according to claim 19 programmed to evaluate assets according to at least one of a 100% cash in hand valuation for the asset, partial cash in hand valuation for the asset, a direct underwriting of the asset and an inferred underwriting of the asset.

19. A computer for selecting a lowest variation assumption for asset valuation in order to limit risk, said computer including a database of asset portfolios, said computer programmed to:

evaluate assets utilizing multiple valuation methodologies which have merit for those particular assets;

select the valuation methodology which is most accurate for the assets being evaluated; and

assign values to the assets.