Methodology N1

The methodology is organised in three phases and fourteen steps. Each step has an input (documents or results of earlier steps) and a verifiable output: a table, a ratio or a chart. The full technical note is available as a PDF among the scientific reports.

A. Data (N1–N5)

N1 Collecting and checking documents

Tax assessments, salary statements, bank statements and contracts; checked for completeness and consistency.

N2 Income

Net monthly income of every member, fixed and variable, with its seasonality.

N3 Living costs

Documented costs per category, compared with published household expenditure statistics.

N4 Assets

Property, vehicles and deposits: value, liquidity and encumbrances.

N5 Debts and instalments

Every debt, with creditor, balance, instalment and overdue amounts.

B. Analysis (N6–N10)

N6 Liquidity

Cash and readily realisable assets against immediate obligations.

N7 Cash flows

Monthly inflows and outflows over twelve months; the months in deficit.

N8 Sustainability ratios

Instalments to income, minimum living balance, coverage of obligations.

N9 Scenarios

Base, adverse and favourable scenario, with explicit assumptions.

N10 Sensitivity analysis

Tornado chart: which factors move the result the most.

C. Synthesis (N11–N14)

N11 Monte Carlo simulation

Thousands of scenarios from distributions instead of point estimates; the probability of inability.

N12 Repayment capacity

The conclusion: what amount can be paid, and with what certainty.

N13 Report

A PDF report with appendices, data tables and charts.

N14 Monitoring

Updates when the data change, compared with the previous report.

What each phase delivers

Phase	Steps	Deliverable
Data	N1–N5	Document file and table of income, costs, assets and debts
Analysis	N6–N10	12-month cash flows, ratios, three scenarios, Tornado chart
Synthesis	N11–N14	Monte Carlo distribution, conclusion, PDF report, update plan