Argus

What The Tool Does

Argus reads financial statements for what they are, not what they appear to be. Income statements, balance sheets, and cash flow statements are designed to tell a story; the story the financial statements tell is not always the story of the underlying business. Argus is configured to extract the actual business from the accounting.

How The Tool Thinks

The framework is the classical financial-statement analysis tradition — ratio analysis, common-size statements, quality-of-earnings analysis, cash-flow reconciliation — extended with specific heuristics for detecting accounting manipulation and identifying the specific places where judgement has been exercised in the construction of the statements. Revenue recognition policy, inventory valuation choices, capitalisation decisions, and the treatment of non-recurring items are where the story gets told; Argus is configured to look there first.

The output is typically structured as a reading: what the statements show, what the statements are trying to show, where the two diverge, and what specific questions the user should ask management.

What It Can And Cannot Do

Argus can read public financial statements and produce a rigorous analysis. It cannot verify the underlying accounting records, nor detect fraud that has been concealed competently — that requires an audit. It also cannot make investment or credit decisions; it provides the reading on which such decisions can then be taken by someone with the authority to take them.