Financials [300]

The Financials score considers Debt Servicing, Return Profile, Risk Adjusted Return Profile, Maximum Drawdown, and Quality. X-Margin captures Financial information on the platform, and can automatically calculate the below factors. X-Margin requests that borrowers upload statements a minimum of every 3 months, and preferably every month.

If Risk Monitoring is active, other financial statement information (e.g. Assets, Portfolio Equity, Liabilities) is considered in the context of the real-time metrics (see the Adjustments section). When Risk monitoring is not enabled, Portfolio Equity and Portfolio Leverage are calculated from Financials.

Factor	Description	Calculation	Weight
Debt Servicing	X-Margin evaluates Interest Coverage, Debt / Liquid Assets, and Operating Margin. Matrices are anchored depending on the strategy of the firm, and the primary revenue sources.	Borrowers receive a score for Interest Coverage, Debt / Liquid Assets, and Operating Margin. A weighted average is calculated for the Debt Servicing score.	70
Return Profile	A history of positive ROA & ROE indicates the ability to create and deploy profitable strategies. Return matrices are anchored depending on the strategy of the firm, and the primary revenue sources.	X-Margin uses a scoring matrix where anchored ROA & ROE are each axis. For investment funds, ROIC is considered.	60
Risk Adjusted Return Profile	X-Margin evaluates the Risk Adjusted Return Profile by analyzing Sharpe Ratio and Income Stability. Matrices are anchored depending on the strategy of the firm, and the primary revenue sources.	Borrowers fall in one of 3 tiers, each having a corresponding point total.	60
Maximum Drawdown	Maximum Drawdown provides insight on the potential worst-case scenario of returns in the context of a volatile digital asset market. Matrices are anchored depending on the strategy of the firm, and the primary revenue sources.	Borrowers fall in one of 3 tiers, each having a corresponding point total.	55
Quality	X-Margin evaluates the quality of financial statement Preparation (i.e., third party, audited, and internal attestation), Recency of financials relative to the evaluation date, History of principal repayment, and account level Detail.	Borrowers receive a score for Preparation, Recency, History, and Detail. A weighted average is calculated for the Quality of Financials score.	55