Financial features and calculation rules

Financial interpretation must preserve the difference between cash movement, accounting income, and a contractual obligation. A language model can help classify evidence, but the reported amounts and ratios should come from versioned deterministic calculations.

Feature contract

Every feature should identify its unit, currency, observation window, as-of timestamp, formula version, contributing evidence, exclusions, missingness, confidence basis, and eligibility for the intended task. A ratio without a known denominator is undefined. A zero debt payment in connected accounts does not establish that the borrower has no debt.

Proposed feature families

Family	Examples	Required qualification
Receipts and income	Eligible operating receipts, payroll recurrence, customer concentration, variability, seasonality	Remove evidenced own-account transfers, financing proceeds, reversals, and duplicate economic events. Do not classify every unknown inflow as income.
Expenses and margins	Operating outflows, fixed/variable costs, gross margin, net margin, payroll burden	Accrual margins require appropriate accounting evidence. Cash outflows alone cannot establish EBITDA.
Debt and obligations	Scheduled principal and interest, recurring debt-service patterns, maturity ladder, covenant headroom	Observed debits are evidence of payments, not necessarily the complete contractual obligation.
Liquidity	Available cash, minimum daily balance, negative-balance days, cash buffer, working capital	Connected-account coverage, restricted balances, undrawn facilities, and snapshot timing matter.
Working capital	Receivables aging, payable aging, inventory turnover, cash conversion cycle	Match periods and accounting policies; incomplete ledgers can bias denominators.
Concentration	Largest customer/supplier shares, industry/counterparty concentration, processor dependence	Measure on resolved economic counterparties, and report unresolved value separately.
Revenue quality	Refund/chargeback rates, reconciliation residuals, delayed settlements, reserve changes	Use consistent transaction cohorts and maturity windows. A chargeback is not automatically fraud.
Financial behavior	Irregular income, new obligations, recurring-payment changes, persistent liquidity pressure	Preserve ambiguity and separate activity change from source failure.
Public context	Rates, FX, industry conditions, evidenced legal events	Respect release vintages and avoid assigning population statistics to an individual.

Explicit calculations

Cash-flow debt-service proxy =
  (eligible operating cash receipts - eligible operating cash outflows)
  / scheduled debt-service cash outflows

Customer concentration =
  eligible sales attributed to the largest resolved customer
  / total eligible sales in the same window

Residual monthly cash =
  eligible monthly net income - essential expenses - required debt payments

Days of cash buffer =
  eligible unrestricted cash / estimated average daily essential cash outflow

The cash-flow proxy is not interchangeable with EBITDA-based DSCR. BDC’s DSCR explanation uses earnings and debt-service inputs; the exact covenant definition belongs to the agreement. A consumer debt-payment-to-income ratio must specify gross or net income. Do not interchange it with stock debt divided by annual income, or with mortgage GDS/TDS. Ratios use consistently defined periods. Annualize only with explicit assumptions and seasonal sensitivity. Preserve adequate precision for ratios; round displayed monetary amounts to two decimals according to the product’s monetary rules. The analytical precision of a source rate is not the same as billing precision.

Error propagation

Quantify how identity errors, unmatched settlements, stale accounts, uncertain categories, and missing liabilities alter features. Recalculate with plausible alternatives and report a range where appropriate. Do not convert a low-quality input into an exact risk probability merely because the calculation produces many decimal places. Use deterministic invariants: reconciled amounts balance within documented tolerances; source versions are not counted twice; excluded financing remains traceable; all evidence predates the cutoff; and a corrected input produces a new feature version. The public-record findings include an original BCE facility table whose CAD-million totals reconcile exactly. The reproducibility package retains the source hash, units, extracted values and calculation. This is an extraction case, not a borrower-risk validation.

Research program

Data and models

Risk analysis

Evaluation and evidence

Financial features and calculation rules

Feature contract

Proposed feature families

Explicit calculations

Error propagation

​Feature contract

​Proposed feature families

​Explicit calculations

​Error propagation

Feature contract

Proposed feature families

Explicit calculations

Error propagation