Method for assessing equity adequacy
First Claim
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1. A method for assessing an automotive finance company'"'"'s equity adequacy comprising:
- quantifying the company'"'"'s sources of creditor protection wherein the sources comprise equity, reserves and net deferred tax liability in the event of an overall loss;
estimating the company'"'"'s potential unexpected worst-case losses for each of a plurality of exposures with 99.9% confidence; and
comparing the company'"'"'s creditor protection to the company'"'"'s potential unexpected worst-case losses to demonstrate the company'"'"'s equity adequacy.
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Abstract
Risk-based method for assessing an automotive finance company'"'"'s equity adequacy wherein sources of creditor protection comprises equity, reserves, net deferred tax liability in the event of an overall loss, future tax liability and lifetime profits. Potential unexpected worst-case losses for each of a plurality of exposures is estimated with 99.9% confidence and compared with the company'"'"'s creditor protection to demonstrate the company'"'"'s equity adequacy.
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8 Claims
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1. A method for assessing an automotive finance company'"'"'s equity adequacy comprising:
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quantifying the company'"'"'s sources of creditor protection wherein the sources comprise equity, reserves and net deferred tax liability in the event of an overall loss;
estimating the company'"'"'s potential unexpected worst-case losses for each of a plurality of exposures with 99.9% confidence; and
comparing the company'"'"'s creditor protection to the company'"'"'s potential unexpected worst-case losses to demonstrate the company'"'"'s equity adequacy. - View Dependent Claims (2, 3, 4, 5, 6, 7, 8)
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