First of all, let's review the concept of testing: cross-testing, that is, for the same key information, two (or more) methods or channels are used to evaluate and analyze whether there are contradictions. If you still don't understand, you can look at the example of accounts receivable inspection in my previous article. )
On-balance sheet rights and interests
When it comes to equity, we should first look at the balance sheet, as follows:
Assets are on the left, liabilities are on the right, and all rights and interests are in the last box in the lower right corner.
Owner's equity = assets-liabilities.
The above picture is also the customer's on-balance sheet equity.
On-balance-sheet equity refers to the investigation and understanding of customers' current situation, such as customers' demand deposits, accounts receivable, inventories, other receivables, fixed assets, bank liabilities, private financing, accounts payable, etc. , obtained by compiling the balance sheet as shown in the above figure.
Simply put, the customer told you about his current balance sheet.
Historical accumulation of rights and interests
There is also an equity algorithm: equity = initial equity+period profit+additional investment-period withdrawal-depreciation.
Initial rights and interests, such as literal meaning, initial rights and interests, when we examine loans, we choose a certain point of rights and interests as the initial rights and interests:
For example, in the 1980s and 1990s, many people started from scratch with no assets or liabilities. Their rights and interests were zero at that time.
Or the customer and partner are divided, and the accounting is clear. The point at that time can also be used as the initial interest in the later loan investigation.
The net profit during the period is the sum of the net profit (excluding personal expenses) generated from that time to the present after selecting an initial equity.
Additional investment is the profit generated by normal operation during the above period, such as parents giving you a sum of money, winning the lottery and so on. (All the people here are individual travelers. )
Period withdrawal is the opposite of additional investment. In order to withdraw funds, such as buying a house for children, the property is not included in the borrower's assets.
Depreciation is the depreciation of equipment, cars, etc.
After explaining the above concepts, we can now start cross-checking. When you investigate, you will find:
On-balance-sheet equity > historical equity
Check to see if there is a mistake in the investigation, or if there are too many assets: for example, there are too many inventory estimates, not so many accounts receivable, and fixed assets are not bought by yourself? Wait a minute ... or the debt is underpaid: maybe the customer has an advance payment that we didn't investigate, or he has private financing that he didn't tell us? Private financing is the most difficult to investigate, and ordinary customers will not tell you, so cross-examination of rights and interests is one of the best inspection methods. In addition, bank liabilities should be the clearest. As soon as the credit information is checked, everything is available. But sometimes affiliated enterprises and related persons (such as wives and children in joint operation, etc. ) are not checked, and their bank liabilities are not included, which will also lead to the expansion of the balance sheet.
The above is that the current situation has not been investigated clearly, or it may be that historical accumulation has been miscalculated. The customer told you that the profit was too high, but there wasn't that much profit. You can compare the profit he said with the industry profit, whether it is more true; It is also possible that he didn't tell you about the additional investment of the funds donated by his parents during his period; It is also possible that he has bad hobbies such as gambling and lost a lot of money in gambling. Or his children have bad hobbies and lost a lot of money, all of which he paid; Or its stock lost a lot; It is also possible that he insured and lost a sum of money; Or maybe he got divorced and got an asset, but you didn't investigate it clearly? ………
Equity on the balance sheet
In a word, the cross-examination of the two is not equal, which is definitely abnormal, and all situations should be carefully checked. Of course, the two are equal, which doesn't necessarily mean that the survey is correct, or maybe you didn't investigate both sides clearly, just equal.
In short, the loan investigation must be conscientious, careful and cross-checked in many aspects to find out the potential risks and take corresponding measures.