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Identifying Red Flags
A thorough review of an annual report can take a human analyst days, even when you know what to look for. Forensic Alpha uses sophisticated NLP algorithms to sift through a company’s financial statements and governance report, extracting relevant accounting and governance data. Then we process and analyse that data, hunting for the presence of common red flags that are known to be indicators of weak fundamentals and/or imminent problems.
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For example , a rapid build-up of “accrued income” on the balance sheet could signal aggressive revenue recognition. A low number of independent directors on the audit committee and an incumbent auditor with a 20-year tenure might raise concerns over the effectiveness of the audit process.
Identifying Red Flags
A thorough review of an annual report can take a human analyst days, even when you know what to look for. Forensic Alpha uses sophisticated NLP algorithms to sift through a company’s financial statements and governance report, extracting relevant accounting and governance data. Then we process and analyse that data, hunting for the presence of common red flags that are known to be indicators of weak fundamentals and/or imminent problems.
For example , a rapid build-up of “accrued income” on the balance sheet could signal aggressive revenue recognition. A low number of independent directors on the audit committee and an incumbent auditor with a 20-year tenure might raise concerns over the effectiveness of the audit process.
Automated Reports
Our algorithms analyse over 1.2 million data points from annual reports and governance disclosures to build up a risk profile for each company. We translate this data into meaningful insights, delivered via an automated report, and available for over 4,000 companies.
Rather than sifting through hundreds of pages of disclosures, investors can focus their attention on the critical threats that really matter. For each item, we assign a “red flag” score from “5” (highly material) to “0” (no concerns). Our reports also provide detailed explanatory text so that investors can quickly understand the context and the significance of the red flag.
Automated Reports
Our algorithms analyse over 1.2 million data points from annual reports and governance disclosures to build up a risk profile for each company. We translate this data into meaningful insights, delivered via an automated report, and available for over 4,000 companies.
Rather than sifting through hundreds of pages of disclosures, investors can focus their attention on the critical threats that really matter. For each item, we assign a “red flag” score from “5” (highly material) to “0” (no concerns). Our reports also provide detailed explanatory text so that investors can quickly understand the context and the significance of the red flag.
Our machine intelligence helps Portfolio Managers to spot critical red flags hidden deep within the financial statements and governance disclosures.
Forensic Alpha uses proprietary machine intelligence to identify risks hidden deep within the financial statements and governance disclosures.
Forensic Alpha Limited
Level 39
One Canada Square
Canary Wharf
London E14 5AB
Forensic Alpha US INC
12 East 49th Street
New York
NY 10017
USA
Forensic Alpha Limited
WeWork
Krishe Emerald
Hyderabad 500081
India
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