Balance Sheet Analysis - Financial Spreading Software

Balance sheet analysis, i.e. the examination of annual financial statements, and the resulting financial ratios are crucial for assessing credit risk. However, this process often leads to time-consuming processing phases and long waiting times.

An emerging trend in this area is the use of financial spreading software, especially for banks. With a solution developed by a partner with the help of Konfuzio AI, we are entering a new era of financial spreading, sometimes also called "EBIL" or "balance sheet analysis".

Financial Spreading, Balance Sheet Analysis or EBIL: What is it?

"What is Financial Spreading?" - You might ask. Financial spreading is the process of collecting and analyzing financial data from financial statements to calculate financial ratios for credit risk assessment. It is a key process in commercial lending, but it can be time-consuming and result in long processing and settlement times. Financial spreading software can help overcome these challenges.

This process is revolutionized by a solution developed by a partner using Konfuzio AI. By automating this process - Automated Financial Spreading - financial institutions can streamline the process of spreading financials, increase efficiency and improve data quality.

Individual Balance Sheet Analysis (EBIL): A look behind the scenes

When a customer sends us his annual financial statements or his income statement (EÜR), these documents reach the Balance Sheet Analysis Department.

An essential step in this process is the conversion of the balance sheet, SuSa or EÜR into the digital valuation system of the institution. Many of you probably know this system as "Individual Balance Sheet Analysis" or simply "EBIL" if you work in a savings bank.

EBIL is an indispensable tool for us in balance sheet analysis and corporate banking.

In EBIL, the individual items of the financial statements are transferred to specific accounts. The aim of EBIL analysis is to correct potential balance sheet cosmetics, known as "window dressing". This involves neutralizing income and expenses that do not correspond to the reporting year or the actual business purpose. In this way, an adjusted net income is presented, which is referred to as "operating income" in EBIL.

EBIL makes it possible to evaluate balance sheets and EÜRs efficiently and quickly.

Another advantage of the EBIL evaluation is that it enables a quick evaluation of the submitted balance sheets and EÜRs. EBIL offers several clear evaluation overviews for assets, liabilities and P&L of the balance sheet and enables a quick analysis of the balance sheet ratios at the push of a button.

Simultaneously with the entry of the individual financial statements, the customer data can be anonymously transferred to a data lake be transmitted to create a data pool for many different industries. This enables comparisons of a customer's balance sheet ratios with those of similar companies.

Repeated evaluations allow us to uncover trends over the years.

This allows you to see at a glance how a company compares to similar companies. If, for example, the return on sales of the evaluated customer is higher than the industry average in the reporting year, this is a positive sign. If the equity capitalization of comparable companies is higher than that of the customer, this should be closely observed.

EBIL allows us to better understand a company in the context of similar companies.

Overall, the EBIL evaluation provides you with valuable insights and makes your work much easier. It is an indispensable tool in our toolbox for balance sheet evaluation and for supporting our corporate customer business.

Advantages of the financial spreading software for banks developed with the help of Konfuzio AI

This financial spreading software offers a number of advantages:

Flexibility: Use pre-built Spreading Financial Statements templates or create flexible, customized templates.

Faster spreads: Financial Spreading Automation increases efficiency and accuracy by automating manual data entry.

Consistency: Ensure consistency, improve data quality, and minimize errors.

In addition to these benefits, the solution provides the ability to automatically extract financial data from documents. This includes support for PDF, JPEG, PNG, TIFF, scanned low-resolution and Excel document types in any source language.

Credit Analysis Software and Financial Spreads

Financial Spreading software goes hand-in-hand with Credit Analysis software to provide you with a comprehensive platform for credit risk. With these spreading tools, you can capture financial data in an intuitive, web-based application, customize reported financial data, and add comments directly to the spreading grid.

The financial spread, which is the difference between the interest rates or yields of two different investments, can thus be easily determined and analyzed. By "spreading the risk," you can ensure that your portfolio is diversified and resilient.

Developed by a Konfuzio partner, 3-29 Financial Statement Spreading is a comprehensive solution that helps financial institutions streamline their financial spreading process and manage credit risk more effectively.

Learn more about this solution and how it can help you efficiently "spread" financial statements.

Contact us now.

Christopher Klee Avatar

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