The Financial Health Analysis System


What's the Problem?
The average organisation is often referred to as a corporation or body. And in many respects the average organisation functions just like a body - specialist functions in different parts of the body, communications systems passing information to and fro, channels carrying vital supplies throughout the body, etc.

And just like the average body, the organisation is subject to breakdown, attacks by outside forces and so forth. The corporate body can be operating at peak efficiency and fitness - or it can be dull, lethargic, and slow to react to external forces. It could be overweight with excess inventory. Its communication systems could be clogged, preventing its control, sensory and reaction mechanisms from reacting quickly.

Smart people have regular health checkups to ensure their bodies are functioning normally, and to warn them if anything is outside normal limits. So too smart directors & managers should  carry out regular financial health checks of their organisation. In addition, smart investors & superannuation fund managers should carry out regular financial health checks of the organisations that they have invested in, or are looking to invest.

For Directors
Directors today are particularly facing increased pressure from authorities to be very aware of the financial situation of the organisations they govern. They cannot use ignorance, unfamiliarity, lack of specialist knowledge or reliance on other people as a defence against not knowing whether the organisation is in a financially healthy situation. This has been strengthened by the recent Centro decision where the courts found that ". . . each director did not honestly carry out his responsibilities as a director" to check the financial statements.

For Investors
Knowing where to invest your hard-earned savings can be a very risky affair. How do you know whether an organisation is financially sound, a reasonable investment, or close to bankruptcy? it's often a very daunting situation trying to read and understand an organisation's annual report and financial statements, with pages of numbers, notes to the accounts, etc. Trying to fathom which numbers to use to carry out even a rudimentary analysis can be very difficult. Which financial analyses should you use, and what do the numbers mean anyway?

The Solution - Checkup™
is a powerful financial analysis system which uses well proven expert analysis rules for analysing the financial health of an organisation.  It uses readily available information from the Profit and Loss Statement, Balance Sheet and other corporate information, to conduct more than 20 financial analyses of the organisation. These are grouped into five major categories as follows:


Liquidity, or the ability for the organisation to pay its debts as they fall due;


Control Measures, i.e. how well the organisation is at controlling its operations;


Debt Burden, how much of the organisation is 'owned' by third parties;


Profitability, Are the shareholders getting a good rate of return?;


Efficiency & Effectiveness, are all the assets of the organisation being used optimally?

In addition Checkup™ calculates the Z-Score, an extremely powerful and reliable indicator of the viability of the organisation.

The analysis carried out by Checkup™ is based on many years of research in financial analysis. In particular the Z-Score is based on over 35 years of research by numerous financial analysts around the world and has been proven to have a 93% accuracy in determining the future viability of an organisation.

For example, an analysis was carried out of Enron Corporation's 2000 Annual Report, the last before they went into bankruptcy in late 2001. Checkup's™ analysis showed there were serious financial concerns, particularly the Z-score which showed Enron to be only marginally viable. Enron's financial information for the financial year ended December 31, 2000 can be seen in the Checkup™  database as part of the beta download below.

An added benefit of Checkup™is that, in addition to storing information about numerous organisations, you can store financial information for multiple periods for an organisation. For example, you could record financial statements for several years from the organisation's annual reports, or (particularly for directors) store and analyse financial information for multiple year to date periods within a financial year. Security of this information is not a problem as the Checkup™ database resides on a local PC, not some internet-based server somewhere around the world.

The Expert Analysis Rules
A powerful feature of Checkup™ is the ability to dynamically modify the Expert Analysis Rules. Each of the financial analyses is divided into four ranges with an appropriate comment for each range. You're able to change the ranges and comments to suit your particular circumstances e.g. analysing particular industries where the ranges would be different. In addition, each of the four ranges is colour-coded to highlight them, and you can change the colour coding to suit your particular requirements

Download the latest version of Checkup™
The latest version of Checkup™ is currently available as a beta test version. It has been completely rewritten to bring it up to date with both the latest financial analysis guidelines and the latest technology.  There is extensive help documentation which explains all the new features of the software as well as providing an outline of the financial analysis conducted by Checkup™. It's anticipated the full version will be available in April 2012

To download the beta version of Checkup™  click the Download button below. This will download a zip file containing two files, the Setup executable and the Checkup™ install file. Unzip the files into a folder on your PC then double click on the Setup executable. Checkup™ will be installed on your PC, including a desktop icon for easy launching of the software.  Note: although the beta version is a fully functioning version it is time limited - the software will cease working after March 31, 2012.



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