The Filter Breakdown option in the Analysis screen is your best friend for understanding how an attribute behaves in a group of loans. Instead of running the filters several times and making notes to understand the effects that an attribute has on the Loss Rate, you can set up your filters, then check the desired attributes you want to test (just like you checked the other filters), select the Filter Breakdown option, and run the analysis.
The trigger to generate a breakdown table for an attribute is simple: at least 2 options in the attribute’s filter must be checked.
If you have a filter with no option checked, you’ll see no breakdown table for that attribute. If you have only one option select, no breakdown either.
The following columns are displayed in each breakdown table:
- Attribute value: the first column is the filter option segmenting the loans
- Loan #: Number of loans in the group
- Loan %: Percentage of loans in the group, out of the universe of accounts being analysed
- Interest: Average interest rate of the loans in the group
- Loss %: The loss rate of the loans in that group
- Loss #: Number of loans in the group that are currently in a late or defaulted status (i.e. that has a Loss Rate different than 0%)
- ROI: The Interest Rate minus the Loss Rate, i.e., the approximate average return you have over your investment, not considering the effects of the actual cash flow
- Quick Chart: A visual representation of the Loan % and Loss % columns. The black bars sizes are proportional to the number of loans, and the red bars are proportional to the average loss rate of the loans. The bars with different colors are not proportional to each other, they are only proportional to its own dimension
Sometimes the analysis require you to see the list of attributes in the natural order of the filters, for example, 0 delinquencies first, then 1 delinquency, then 2, and finally 3 or more. But sometimes you’ll want to sort the results by the loss rate, so you can quickly identify which options are reducing your ROI. You have that flexibility and much more:
- You can click on the column header to sort the tables by that field
- You can click again to change the order to descending
- You can also sort the columns using the Sort By dropdown box under Filter Breakdown
- If you click on the first column the order will be the natural sequence for the attribute values
- The bars in the Quick Chart will also change order to match the table
Finally, the Breakdown Current Status option will also output a breakdown table with the current status of the loans in the filter, so you can get some details regarding the calculated loss rate.