PROFIT & LOSS ANALYSIS

A Profit & Loss analysis is a comprehensive review of an investment portfolio’s activity during a specified time frame. The SFS P&L is derived from an account’s monthly statements and transactions and includes several individually powerful reports.

The standard SFS P&L includes the following reports:

Total Investment Summary
Reconciliation of cash activity and investment-generated activity.

Annual Profit/(Loss)
Profit/loss of the account for each year that it was open.

Monthly Profit/(Loss)
Schedule showing monthly cash flow and monthly and cumulative profit/loss.

Cumulative Profit/(Loss)
Cumulative P&L as calculated in the Monthly P&L report, graphed over the life of the account.

Month-End Equity
Account equity graphed over the life of the account.

Return on Investment – Summary
Trade gain/loss summarized by issue type (Equity, Bond, Mutual Fund, etc.)

Return on Investment – By Holding
Investment activity by issue, showing trade gain/loss, income and net return on investment.

Return on Investment – Transaction Detail
Trade gain/loss summarized by investment, grouped by issue type.

Cash Transactions
All cash transactions grouped by type (Deposit, Withdrawal, Interest, etc.)

Trade Transactions Chronology
Chronological listing of all trade transactions.

Cash Transactions Chronology
Chronological listing of all cash transactions.

Income Summary
Schedule showing all income, grouped by investment.

Turnover
Schedule showing monthly market, cash and equity values, with yearly turnover by market and equity values and average annualized turnover.

Cost Maintenance Factor
Ratios of commissions and total costs to equity and market values.

A P&L analysis can be customized with:

• Truncated Time Frames – To create a subset of the full analysis.
• Custom Valuations – To utilize client-supplied data or other available resources.
• Selected Data Elements – To remove or add particular report information.
• Custom Formats – To create custom presentation formats – i.e., logo, text or dates.

SUPPLEMENTAL ANALYSES

In order to better understand the story behind the P&L numbers, SFS offers additional reports that can be of assistance in understanding the effects of the market at work, and can be used as an aid to mitigate any damage number.

Alternative Investment Strategy
The Alternative Investment Strategy measures the difference between actual account performance and various alternative allocations over time. This analysis illustrates how the investment would have performed if funds were invested in various strategies consisting of any mix of stocks, mutual funds, bonds, indices, etc. The construction of this alternative portfolio is typically used in areas relating to portfolio management and suitability.

Issue Analysis
Issue Analysis is a set of three color-coded reports. It is especially useful when there are a limited number of investments at issue within a large account, or when they are held across multiple accounts.

• Combined Trade Chronology
• Combined Trade ROI Detail
• Combined Trade Transactions

Combined P&L
Accounts that are with the same firm, and between which 100% of the assets are transferred, are automatically combined for the standard P&L. However, any number of accounts may be combined to produce a single P&L.

Concentration Analysis
The Concentration Analysis is designed to graphically present the month-to-month allocation of investments in a portfolio, to different levels of detail. Portfolio allocation may be illustrated by (in increasing level of detail):

• Industry Sector (technology, consumer, industrial, financial, etc.)
• Industry Group (telecom, pharmaceuticals, media, etc.)
• Industry Subgroup (computers, wireless equipment, etc.)
• Individual Equity Issue/Fund

All concentration analysis graphs include an overlaid line graph of the cumulative P&L for the account that is calculated in the standard P&L. This is a useful aid for correlating changes in portfolio concentration to overall account performance. It would be appropriate for claims involving suitability and issues of investment concentration. The concentration analysis graphs may also be overlaid with your choice of investment indices, such as the S&P 500, NASDAQ or Russell 2000.

Firm-Initiated Position Analysis

Quantifies account-trading activity and assigns account performance responsibility. The compelling feature of the report distinguishes the total trading gain/loss for firm, client or broker-initiated positions from the total trading gain/loss for those positions transferred into the firm.

Index Concentration Comparison
Graphic comparisons of securities accounts with known market indices can provide powerful support for your individual case strategy. Quickly and easily compare the composition of the account directly to the composition of a major market index (in our example, the S&P 500 is used), over a specific period of time, by sector or individual stock.

Open/Close Analysis
An effective schedule showing trade matches on a first-in/first-out basis, with net trading result and days held.

• Open/Close Analysis (by Result)
• Open/Close Analysis (by Days Held)

Option Strategy Analysis
Option strategy analyses combine options and common stock, rolled back to trade dates, making it easy to decipher buy-writes, spreads, straddles and various other option strategies.

Performance Analysis
The Performance Analysis report provides cumulative monthly P&L results (or daily P&L results, provided a Daily P&L has been completed), charted against the daily closing of one or more index values (such as the S&P 500, NASDAQ, Russell 2000, etc.). This high-impact graphic analysis provides a clear and compelling visual interpretation of portfolio performance versus commonly accepted industry indices.

Performance Comparison Analysis
This high-impact data chart quickly communicates essential elements of case liability and damage issues, providing a clear and compelling illustration of portfolio performance versus multiple commonly accepted industry indices that are color-coded and on one chart.

Realized/Unrealized Analysis
This analysis isolates all trading activity (bought/sold) in an account and the resulting profit/loss. Unrealized activity includes any issue where a transaction was marked to the market.

Risk Exposure Analysis
Available for accounts holding either options or equity issues, the Risk Analysis report details the difference between the strike price of the investment and cash required to cover various investment strategies. This report can easily be prepared in a graphic format, clearly presenting the relative risk of selected investment strategies.

Solicited/Unsolicited Analysis
Segmenting trading activity by trade type (solicited/unsolicited) can offer a unique perspective on investment strategy and liability issues.

What-If Scenarios
This suite of reports provides additional “hypothetical analyses,” comparing a hypothetical investment strategy to actual portfolio performance. Examples of what-if scenarios include:

• What-if held issues – Track performance of liquidated securities had they instead been held during the total investment time period.
• What-if price issues – Track inferred performance of a portfolio based on pricing equities at various levels.
• What-if timing issues – Track hypothetical account performance based on trading activity undertaken at various time periods (with time sensitive equity pricing).

What-if scenario data can be exported to a variety of charting/graphic programs to create highly effective presentation materials.

ADDITIONAL DATA SERVICES

Custom Research Using Bloomberg and Morningstar Data
Custom research and data entry capabilities beyond those of the typical securities case are available through SFS. With a variety of resources within and outside the company, we can help design a research program to get you the information you need. Class action cases involving extensive analytics, fee analysis, pricing behavior and predictive modeling are just some of the areas SFS analysts are able to examine. Through high volume data entry projects utilizing a variety of publicly available sources, including Bloomberg and Morningstar, we have developed proprietary data resources, including historic annuity pricing.

Excel Data Extract 
SFS has the capability to export all available data into a Microsoft Excel spreadsheet format, enabling the client to perform their own data reorganization and customized review. It should be noted that SFS is unable to authenticate client analyses performed in this manner.

Bloomberg Research
The functionality of the Bloomberg database is a powerful tool in preparing various investment analyses and exhibits. From comparative equity charting to historical pricing, SFS has the research specialists on staff to assist you in utilizing this vast repository of data and information.