13 November 2008

A new financial analysis application has been launched to help improve the accuracy of profit and loss (P&L) calculations.

Once people fully understand the accuracy and simplicity of C2BII, they will immediately scrap NPV and embrace the new methodology

Charalampos Oikonomidis, Designer, C2BII Cashflow to Bank and Income Impact (C2BII) will replace the Net Present Value (NPV) method of analysis, which is seen as inaccurate, according to the software's designer Charalampos Oikonomidis.

"The generally considered state-of-the-art methodology, NPV, is so inaccurate that one can't confidently base financial decisions on it," said Oikonomidis. "Even in the most carefully prepared financial analysis performed through the NPV method or its derivatives such as IRR, one can have a field day punching holes in its credibility and accuracy. NPV has major issues where variables are handled as an approximation instead of being accurately calculated. Also, some variables are insufficiently calculated or not taken into consideration."

The C2BII software application, which is currently compatible only with Microsoft SQL Server 2005, enables analysts to accurately calculate P&L in business evaluation scenarios, as well as the profitability of general 'what if' scenarios.

"Once people fully understand the accuracy and simplicity of C2BII, they will immediately scrap the currently used NPV method and embrace the new methodology," added Oikonomidis.

The company claims that even users with no finance or accounting experience can produce an accurate answer to a financial question within 60 seconds of data entry in difficult and complicated scenarios.

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