System and Method for Identifying Accounting Anomalies to Help Investors Better Assess Investment Risks and Opportunities

• US 20120254067A1
• Filed: 04/05/2012
• Published: 10/04/2012
• Est. Priority Date: 06/29/2005
• Status: Abandoned Application

• Current Assignee: Joel Litman, Ronald J. Graziano
• Original Assignee: Joel Litman, Ronald J. Graziano
• Inventors: Litman, Joel, Graziano, Ronald J.
• Application Number:
  US13/440,664
• Publication Number:
  US 20120254067A1
• Time in Patent Office: Days
• US Class Current: 705/36.R
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/02 Banking, e.g. interest calculation or account maintenance credit or loans G06Q40/03
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis
• CPC Class Codes: G06Q 40/08 Insurance
• CPC Class Codes: G06Q 40/12 Accounting

Abstract

A system and method of identifying accounting anomalies to assess investment risks and opportunities. The steps include receiving company data and criteria metrics, and evaluating the company data in view of the criteria metrics to produce a performance indicator. Information, such as an easily read visual flag is provided to a client identifying the performance indicator.

Claims

1. A computer-implemented method for determining a financial risk profile for a company, the method comprising:

selecting, using a computer, a number of risk categories being associated with financial risk areas;

selecting, using the computer, for each of the number of risk categories, a number of individual characteristics to support the risk category;

collecting, using the computer, for each of the number of risk categories, company financial data corresponding to each of said number of individual characteristics supporting the risk category; and

assigning a first risk metric to each of the number of risk categories based on the company financial data;

thereby providing a risk profile for the company comprising a collection of first risk metrics assigned to each of the number of risk categories.

2. The method of claim 1, wherein selecting a plurality of risk categories further comprises:

selecting a number of primary risk categories; and

selecting, for each of the number of primary risk categories, a number of secondary risk categories to support the primary risk category;

wherein the one or more individual characteristics support each of the number of secondary risk categories and the first risk metrics are assigned to each of the number of secondary risk categories.

3. The method of claim 2, further comprising assigning a second risk metric to each of the number of primary risk categories based on the collection of first risk metrics assigned to each of the number of secondary risk categories supporting the primary risk category.

4. A computer-implemented method for determining financial risk profiles for a portfolio of companies, the method comprising:

selecting, using a computer, a number of primary risk categories being associated with financial risk areas;

selecting, using the computer, for each of the number of primary risk categories, a number of secondary risk categories to support the primary risk category;

selecting, using the computer, for each of the number of secondary risk categories, a number of individual characteristics to support the secondary risk category;

for each of the companies in the portfolio;

collecting, using the computer, for each of the number of secondary risk categories, company financial data corresponding to each of the number of individual characteristics supporting the secondary risk category; and

assigning, using the computer, a first risk metric to each of the number of secondary risk categories based on the company financial data; and

assigning, using the computer, a second risk metric to each of the number of primary risk categories based on the collection of first risk metrics assigned to each of the number of secondary risk categories supporting the primary risk category;

thereby providing a risk profile for each company in the portfolio comprising a collection of first risk metrics assigned to each of the number of secondary risk categories for the company and a collection of second risk metrics assigned to each of the number of primary risk categories for the company.

5. The method of claim 4 further comprising selectively displaying for each company in the portfolio at least one of the collection of first risk metrics assigned to each of the number of secondary risk categories, the collection of second risk metrics assigned to each of the number of primary risk categories, and a ranking of the company relative to other companies in the portfolio based on any of the foregoing.

6. The method of claim 4 further comprising visually indicating those companies having a high-risk profile relative to other companies in the portfolio.