Transcription of NET BALANCE CALCULATIONS - Transwest Equities
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P a g e | 1 N E T B A L A N C E C A L C U L A T I O N S I N TR ODU C TI ON OVERVIEW The broad and fundamental purpose of the NET BALANCE calculation is to explain precisely the amount of cash loaned to the borrower and to other third parties on behalf of the borrower which exceeded the collections at time of charge-off. In other words, when a pre-computed loan transaction is deemed to be either an Active yet Non-paying asset, or a closed account charged to profit and loss, what is the exact dollar loss (gain) of that account on this business in either stage of existence? DETAILS The NET BALANCE loss (gain) figure represents the pure CASH costs of one loan. Opportunity costs, interest costs of the cash, labor costs to collect the account, legal fees incurred, repossession fees paid and every other cost consideration is NOT a variable in the equation of the NET BALANCE .
P a g e | 2 G. INTEREST EARNED: Amount of PRINCIPAL PAID applied towards interest earnings as allowed by A) Actuarial formula; or B) …
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