@v587d/capital-generation 2.7.7 → 2.7.9

package/selected-skills/financeskills/skills/revenue-recognition/assets/allocation-workpaper-template.md

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+# Revenue Recognition Workpaper (IFRS 15 / ASC 606)
+
+**Contract:** {id} | **Customer:** {name} | **Signed:** {date} | **Transaction price:** {amount}
+
+## Step 1-2: Contract & Performance Obligations
+| # | Performance obligation | Distinct? | Timing (PIT / over time) | Measure of progress |
+|---|---|---|---|---|
+
+## Step 3: Transaction Price
+Fixed: {x} | Variable (constrained): {x} | Financing component: {y/n} | Non-cash: {x}
+
+## Step 4: Allocation (relative SSP)
+| PO | SSP | SSP % | Allocated price |
+|---|---|---|---|
+| | | | |
+| **Total** | {ssp_total} | 100% | **{price - must tie}** |
+
+## Step 5: Recognition Schedule
+| PO | {p1} | {p2} | {p3} | {p4} | Total |
+|---|---|---|---|---|---|
+
+## Period-End Position
+Revenue recognised to date: {x} | Billed: {x} | Contract asset / (liability): {x}
+
+## Journal Entries
+| Date | Account | Dr | Cr |
+|---|---|---|---|
+
+---
+*Allocation computed with scripts/calculate.py (allocate_transaction_price). AI-prepared - review required.*

package/selected-skills/financeskills/skills/revenue-recognition/references/ifrs15-guide.md

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+# IFRS 15 / ASC 606: The Five-Step Model
+
+## Step 1 — Identify the Contract
+Criteria: approved, rights identifiable, payment terms identifiable, commercial substance, collection probable. Combine contracts entered near the same time with the same customer if negotiated as a package.
+
+## Step 2 — Identify Performance Obligations (POs)
+A promised good/service is distinct if: (a) customer can benefit from it alone or with readily available resources, AND (b) it is separately identifiable in the contract (not highly integrated, not significantly modifying another good/service).
+- Software + critical customization = often ONE PO.
+- Software + standalone support = TWO POs.
+
+## Step 3 — Determine Transaction Price
+- Variable consideration (rebates, penalties, usage tiers): estimate via expected value or most-likely amount, constrained so reversal is highly improbable.
+- Significant financing component if timing gap > 12 months.
+- Non-cash consideration at fair value.
+
+## Step 4 — Allocate to POs
+Pro-rata on standalone selling prices (SSP). SSP hierarchy: observable price → adjusted market assessment → expected cost plus margin → residual (restricted).
+
+## Step 5 — Recognize Revenue
+Over time if ANY: (a) customer simultaneously receives/consumes, (b) asset created/enhanced is customer-controlled, (c) no alternative use + enforceable right to payment for performance to date. Otherwise point in time (control transfer indicators: title, possession, risks/rewards, acceptance).
+
+## Contract Modifications
+- Adds distinct goods at SSP → separate contract.
+- Adds distinct goods NOT at SSP → prospective (terminate & replace).
+- Remaining goods not distinct → cumulative catch-up.
+
+## Disclosures
+Disaggregated revenue, contract balances (contract assets/liabilities), remaining performance obligations (backlog), significant judgments.

package/selected-skills/financeskills/skills/revenue-recognition/references/saas-rev-rec.md

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+# SaaS Revenue Recognition Patterns
+
+## Typical POs in a SaaS Contract
+| Element | Distinct? | Pattern |
+|---|---|---|
+| Subscription/hosting | Yes (the core PO) | Ratable over term |
+| Implementation/setup | Usually NOT distinct if no standalone value | Roll into subscription, recognize over term (or over expected customer life if material) |
+| Premium support | Yes if sold separately | Ratable |
+| Usage/overage fees | Variable consideration | Recognize as usage occurs (royalty-style exception often applies) |
+| Professional services (config, training) | Often distinct | As delivered |
+
+## Key Judgments
+- **Setup fees**: Non-refundable upfront fees rarely transfer a distinct service → defer and amortize. Material renewal option advantage → amortize over expected life, not initial term.
+- **Term licenses + cloud**: On-prem license is point-in-time; SaaS is over-time. Hybrid deals need SSP allocation.
+- **Free trials/discounted first year**: Total contract price spread over total committed term.
+
+## Metrics Bridge (for finance reviews)
+- Billings = Revenue + ΔDeferred Revenue.
+- ARR ≠ revenue: ARR is contracted run-rate; revenue is recognized.
+- A growing gap between billings and revenue signals lengthening prepay terms, not necessarily growth.
+
+## Common Errors
+1. Recognizing setup fees on go-live (should be deferred).
+2. Straight-lining usage revenue (should follow actual usage).
+3. Ignoring material rights from renewal discounts.
+4. Commission costs (ASC 340-40 / IFRS 15 contract costs): capitalize and amortize over benefit period, including renewals if commissions on renewal aren't commensurate.

package/selected-skills/financeskills/skills/risk-assessment/EXAMPLE.md

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+# Worked Example - risk-assessment
+
+## Ask
+
+> Our portfolio is 40% tech stocks and 60% crypto. What's the risk if the Fed raises interest rates?
+
+## What a correct response contains
+
+Should identify high interest rate sensitivity in tech and crypto. Should discuss the impact on the discount rate (valuing tech) and liquidity (crypto). Should suggest a VaR calculation or stress test. Should recommend diversification or hedging strategies.
+
+## File-driven variant
+
+With fixture(s) `evals/files/daily_returns.csv`:
+
+> Portfolio value $10,000,000. From the attached daily return history (evals/files/daily_returns.csv), compute 95% one-day historical VaR (in % and $), 95% parametric VaR assuming sigma=1.2% and zero mean, and annualized volatility. Compare the two VaR estimates.
+
+Expected: Historical VaR 1.94% ($194,370); parametric VaR $197,388; annualized vol 19.4%.
+
+## Compute, don't estimate
+
+All figures above come from [`scripts/calculate.py`](./scripts/calculate.py) - import its functions rather than doing arithmetic in prose.

package/selected-skills/financeskills/skills/risk-assessment/SKILL.md

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+---
+name: risk-assessment
+description: When the user wants to identify, quantify, and mitigate financial risks. Also use when the user mentions "market volatility," "credit risk," "liquidity gap," "stress testing," "Value at Risk," "VaR," "black swan events," or "what if the market crashes." Use this for portfolio management and enterprise risk.
+metadata:
+  version: 1.1.0
+---
+
+# Risk Assessment
+
+You are a Risk Manager. Your goal is to identify potential threats to financial stability and recommend mitigation strategies to protect capital.
+
+## Initial Assessment
+
+1. **Risk Scope**
+   - Portfolio risk, Credit risk, or Operational risk?
+   - What is the time horizon (e.g., 1-day VaR, 1-year default risk)?
+
+2. **Data Requirements**
+   - Historical price volatility.
+   - Counterparty credit ratings.
+   - Current liquidity ratios.
+
+---
+
+## Risk Framework
+
+### Priority Order
+1. **Identification** (What could go wrong?).
+2. **Quantification** (How likely is it and how much will it cost?).
+3. **Mitigation** (How can we lower the impact?).
+4. **Monitoring** (How do we track the risk over time?).
+
+---
+
+## Technical Risk Steps
+
+### 1. Value at Risk (VaR)
+- Calculate VaR at 95% and 99% confidence levels using historical or parametric methods.
+- Explain the result: "There is a 5% chance the portfolio will lose more than $X in a single day."
+
+### 2. Stress Testing
+- Simulate "Black Swan" scenarios (e.g., interest rate spike, currency devaluation, sector-specific crash).
+
+### 3. Credit Risk Review
+- Evaluate the probability of default for key counterparties using Altman Z-Score or similar models.
+
+---
+
+## Output Format
+
+### Risk Dashboard Structure
+
+**Executive Summary**
+- Top 3 Risk Exposures.
+- Risk Appetite Alignment (Within/Exceeding limits).
+
+**Quantitative Assessment**
+- VaR Analysis Table.
+- Stress Test Results (Scenario vs. Estimated Loss).
+- Concentration report (Are we too heavily invested in one area?).
+
+**Mitigation Plan**
+1. Hedging recommendations (Options, Swaps).
+2. Diversification steps.
+3. Liquidity reserve requirements.
+
+---
+
+## Scripts
+- [calculate.py](./scripts/calculate.py): Deterministic functions for this skill's core computations. Run `python3 scripts/calculate.py` to self-test; import the functions instead of doing mental math.
+
+---
+
+## References
+- [Risk Metrics Guide](./references/risk-metrics.md): Explaining VaR and Z-Score.
+- [Mitigation Strategies](./references/hedging-guide.md): Derivatives and diversification basics.
+
+---
+
+## Related Skills
+- **investment-analysis**: To factor risk into the valuation.
+- **financial-analysis**: For detecting deteriorating liquidity signals.
+- **budget-forecast**: For building risk-adjusted financial plans.

package/selected-skills/financeskills/skills/risk-assessment/references/hedging-guide.md

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+# Hedging Guide: Managing Financial Exposure
+
+Strategies for protecting an entity from adverse price movements in markets.
+
+## 🏛️ Common Hedging Instruments
+
+### 1. Options
+- **Put Options**: Protect against falling prices (downside protection).
+- **Call Options**: Protect against rising prices (for buyers of commodities).
+
+### 2. Futures & Forwards
+Contractual obligations to buy or sell an asset at a predetermined price on a future date. Used to lock in prices today.
+
+### 3. Swaps (Interest Rate Swaps)
+Exchanging floating-rate interest payments for fixed-rate payments to protect against rising interest rates.
+
+---
+
+## 🔍 The Goal of Hedging
+The goal of hedging is **NOT** to make a profit. It is to **REDUCE UNCERTAINTY** and protect the core operations of the business from market volatility.
+
+## 🔗 Sources
+- [Investopedia: Hedging Definition](https://www.investopedia.com/terms/h/hedging.asp)
+- [CFI: Hedging Strategy](https://corporatefinanceinstitute.com/resources/knowledge/trading-investing/hedging-strategy/)

package/selected-skills/financeskills/skills/risk-assessment/references/risk-metrics.md

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+# Risk Metrics: VaR & Z-Score
+
+Quantitative tools for measuring the probability and impact of financial failure.
+
+## 🏛️ Value at Risk (VaR)
+VaR measures the potential loss in value of a risky asset or portfolio over a defined period for a given confidence interval.
+
+### Interpretation
+"Our 1-day 95% VaR is $1M." 
+This means there is a **5% probability** that the portfolio will lose **more than $1M** in a single day.
+
+---
+
+## 🔍 Altman Z-Score
+A formula used to predict the probability that a firm will go into bankruptcy within two years.
+
+### The Zones
+- **Z > 2.99**: "Safe" Zone.
+- **1.81 < Z < 2.99**: "Grey" Zone (Caution required).
+- **Z < 1.81**: "Distress" Zone (High probability of bankruptcy).
+
+## 🔗 Sources
+- [Investopedia: Value at Risk](https://www.investopedia.com/terms/v/var.asp)
+- [CFI: Altman's Z-Score Model](https://corporatefinanceinstitute.com/resources/knowledge/finance/altmans-z-score-model/)

package/selected-skills/financeskills/skills/sox-compliance/EXAMPLE.md

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+# Worked Example - sox-compliance
+
+## Ask
+
+> I need to test a daily three-way-match control in P2P for the full year. Population is about 18,000 matched invoices. How many samples, how do I pick them, and what do I document?
+
+## What a correct response contains
+
+Sample of 25-40 (daily/per-transaction frequency), random selection across the full period including period-end, population completeness validation against the GL/system, and item-level attribute documentation.
+
+## File-driven variant
+
+With fixture(s) `evals/files/revenue_population.csv`:
+
+> This is the Jan-May population for the revenue approval control (evals/files/revenue_population.csv), which operates per-transaction (daily frequency). Determine the sample size per standard SOX guidance for a daily control, select the sample reproducibly (state your method/seed), test approval status across the FULL population programmatically, and classify any exceptions.
+
+Expected: Daily/multiple-times-daily control -> 25 selections (or 40 per some methodologies - state the table used). Programmatic scan of all 120 items finds 25 missing approvals -> exceptions to evaluate as deficiency; given the rate, classify at least significant-deficiency pending compensating controls and quantitative materiality.

package/selected-skills/financeskills/skills/sox-compliance/SKILL.md

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+---
+name: sox-compliance
+description: When the user wants to plan or execute SOX 404 control testing, select audit samples, build testing workpapers, or classify control deficiencies. Also use when the user mentions "SOX testing," "ICFR," "key controls," "sample selection," "test of design," "test of operating effectiveness," "significant deficiency," or "material weakness."
+metadata:
+  version: 1.0.0
+---
+
+# SOX 404 Compliance Testing
+
+You are an Internal Controls Manager. Your goal is to test internal controls over financial reporting (ICFR) with defensible methodology: right scope, right samples, right documentation, right deficiency conclusions.
+
+## Initial Assessment
+
+1. **Scoping**
+   - Significant accounts and disclosures (quantitative materiality + qualitative risk).
+   - Mapped processes (revenue, P2P, payroll, close, ITGC) and their key controls.
+   - Control types: preventive/detective, manual/automated/IT-dependent manual.
+
+2. **Testing Context**
+   - Test of design (TOD) vs. test of operating effectiveness (TOE).
+   - Control frequency (drives sample size) and period covered.
+   - Reliance strategy: management testing vs. external auditor reliance.
+
+---
+
+## Testing Framework
+
+### Sample Sizes by Control Frequency (standard practice)
+| Frequency | Population (annual) | Minimum Sample (TOE) |
+|---|---|---|
+| Annual | 1 | 1 |
+| Quarterly | 4 | 2 |
+| Monthly | 12 | 2–4 |
+| Weekly | 52 | 5–9 |
+| Daily | ~250 | 20–40 |
+| Multiple times daily / per transaction | >250 | 25–60 |
+Automated controls: test one instance per configuration + ITGC reliance (benchmarking permitted if ITGCs strong and no change).
+
+### Selection Method
+Random or haphazard WITHOUT bias; document the population source, completeness check of the population, and selection method. Cover the full period including period-end.
+
+### Deficiency Classification
+| Severity | Definition | Escalation |
+|---|---|---|
+| Control deficiency | Possible misstatement is inconsequential | Process owner remediation |
+| Significant deficiency | Less severe than MW but important enough to merit attention of those charged with governance | Audit committee reporting |
+| Material weakness | Reasonable possibility a MATERIAL misstatement would not be prevented/detected timely | Disclosure (ICFR opinion impact) |
+Evaluate: likelihood × magnitude, compensating controls, prudent-official test, aggregation with other deficiencies in the same account/assertion.
+
+---
+
+## Technical Analysis Steps
+
+### 1. Test of Design
+Walk through one transaction end-to-end; assess whether the control, AS DESIGNED, addresses the risk/assertion (C, E/O, A, V, P&D).
+
+### 2. Test of Operating Effectiveness
+Execute the sample plan; for each item document: attribute tested, evidence inspected, performer, exception Y/N. One exception → expand sample or conclude deficiency (no "isolated exception" without root cause analysis and expanded testing).
+
+### 3. Deficiency Evaluation
+Root cause, magnitude (max exposure, not observed error), likelihood, compensating controls actually tested, aggregation. Conclude severity with rationale.
+
+---
+
+## Output Format
+
+### SOX Testing Workpaper
+
+**Header**: Control ID, description, frequency, owner, assertion(s), period, tester, date.
+
+**Population & Sample**: source report, completeness validation, size, method, items listed.
+
+**Attributes & Results**: attribute matrix per sample item, exceptions detailed.
+
+**Conclusion**: Effective / Deficient + severity classification + remediation owner and deadline.
+
+---
+
+## References
+- [Sampling Methodology](./references/sampling-methodology.md): Sample size rationale, expansion rules, and ITGC benchmarking conditions.
+
+---
+
+## Related Skills
+- **audit-checklist**: For the broader (ISA/external) audit program beyond ICFR.
+- **risk-assessment**: For the risk assessment that drives SOX scoping.
+- **close-management**: Close process controls are perennial SOX scope.
+- **forensic-accounting**: When testing surfaces indicators of intentional override.

package/selected-skills/financeskills/skills/sox-compliance/references/sampling-methodology.md

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+# SOX Sampling Methodology
+
+## Sample Size Logic
+Attribute sampling at 90% confidence, 0 expected deviations, ~10% tolerable rate yields ~22–25 items for large populations — the source of the common "25 for daily controls" convention. Lower-risk controls or strong ITGC environments justify the lower end of ranges; higher risk (new control, prior deficiency, management override exposure, period-end estimates) pushes to the upper end.
+
+## Risk-Tiering Adjustments
+| Factor | Effect on sample |
+|---|---|
+| Prior-year exception on this control | +50–100%, no benchmarking |
+| New/changed control or system | Test post-change period only, full sample within it |
+| High judgment/estimation control | Upper end + senior reviewer |
+| Strong, tested ITGCs + automated control | 1 per configuration; benchmark up to 2 future years if no change |
+
+## Exception Handling Protocol
+1. Confirm it's a true exception (not documentation gap — but chronic documentation gaps ARE control failures).
+2. Root cause with the control owner, in writing.
+3. Expand: common practice is to double the sample with zero further tolerance; any second exception → control concluded ineffective for the period.
+4. Never average away exceptions across periods; a mid-year remediation splits the testing period in two.
+
+## Population Completeness (the step that fails QA reviews)
+Before sampling, prove the population is complete: reconcile the report to the GL/system of record, validate report parameters (dates, entities, statuses), and for ITGC-dependent reports, confirm the report logic itself is tested (IPE — information produced by the entity).
+
+## Interim vs. Year-End (Rollforward)
+Interim testing (e.g., through Q3) requires rollforward procedures: inquiry + observation at minimum, re-testing for higher-risk controls, covering the stub period.
+
+## Documentation Minimum Per Sample Item
+Unique identifier, date, evidence examined (name the document), attribute-by-attribute pass/fail, tester initials/date. "No exceptions noted" without item-level detail is not evidence.

package/selected-skills/financeskills/skills/startup-valuation/EXAMPLE.md

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+# Worked Example - startup-valuation
+
+## Ask
+
+> We have a SaaS startup with a working MVP and 2 technical co-founders. We're raising $500k. How much should we be valued at?
+
+## What a correct response contains
+
+Should apply the Berkus Method to assign value for 'Sound Idea', 'Prototype', and 'Quality Management'. Should ask about traction or TAM. Should provide a pre-money valuation range and suggest a stake for the $500k investment.
+
+## File-driven variant
+
+With fixture(s) `evals/files/round_terms.csv`:
+
+> Apply the VC method to the attached round terms (evals/files/round_terms.csv): compute post-money and pre-money valuation, the investor's required ownership, the implied IRR of a 10x-in-5-years target, and founder ownership after the round.
+
+Expected: Post-money $10,000,000; pre-money $8,000,000; investor ownership 20%; implied IRR 58.5%; founder falls to 48%.
+
+## Compute, don't estimate
+
+All figures above come from [`scripts/calculate.py`](./scripts/calculate.py) - import its functions rather than doing arithmetic in prose.

package/selected-skills/financeskills/skills/startup-valuation/SKILL.md

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+---
+name: startup-valuation
+description: When the user wants to value an early-stage company that may have little or no revenue. Also use when the user mentions "pre-seed valuation," "Berkus method," "VC method," "scorecard valuation," "valuing a startup," or "dilution modeling."
+metadata:
+  version: 1.0.0
+---
+
+# Startup Valuation
+
+You are a Venture Capital Associate. Your goal is to determine a fair pre-money valuation for an early-stage entity using methodologies designed for high-uncertainty environments.
+
+## Initial Assessment
+
+1. **Stage & Traction**
+   - Is the company Pre-Seed, Seed, or Series A?
+   - Do they have a Minimum Viable Product (MVP)?
+   - What is the monthly growth rate of users/revenue?
+
+2. **The Team**
+   - Is there a technical co-founder?
+   - What is the previous exit experience of the founders?
+
+3. **Market Context**
+   - What is the Total Addressable Market (TAM)?
+   - What are the recent valuations of similar startups in this sector?
+
+---
+
+## Valuation Framework
+
+### Priority Order
+1. **Qualitative Scoring** (Assessing the foundation via Berkus or Scorecard).
+2. **VC Method Calculation** (Working backwards from a target exit value).
+3. **Comparative Analysis** (Reviewing similar deals in the same stage/region).
+4. **Synthesis** (Determining the final pre-money valuation range).
+
+---
+
+## Technical Valuation Steps
+
+### 1. Berkus Method Analysis
+Assign a value ($0 to $500k) for each of the following:
+- Sound Idea (Basic value).
+- Prototype (Reducing technology risk).
+- Quality Management Team (Reducing execution risk).
+- Strategic Relationships (Reducing market risk).
+- Product Rollout/Sales (Reducing production risk).
+
+### 2. VC Method (Exit-Oriented)
+1.  Estimate the **Exit Value** (based on comps at exit).
+2.  Identify the **Target Multiple of Money** (e.g., 10x).
+3.  Calculate the **Post-Money Valuation** (`Exit Value / Target Multiple`).
+4.  Subtract the **Investment Amount** to find the **Pre-Money Valuation**.
+
+---
+
+## Output Format
+
+### Startup Valuation Memo Structure
+
+**Executive Summary**
+- Recommended Pre-Money Valuation.
+- Key strengths of the opportunity.
+
+**Methodology Breakdown**
+- **Berkus Scorecard**: Qualitative breakdown.
+- **VC Method**: Exit assumptions and math.
+
+**Deal Terms**
+- Suggested equity stake for the requested investment.
+- Post-money valuation.
+
+---
+
+## Scripts
+- [calculate.py](./scripts/calculate.py): Deterministic functions for this skill's core computations. Run `python3 scripts/calculate.py` to self-test; import the functions instead of doing mental math.
+
+---
+
+## References
+- [VC Method Guide](./references/vc-method.md): Deep dive into exit modeling.
+- [Berkus Method Origins](./references/berkus-method.md): Historical context and weighting.
+
+---
+
+## Related Skills
+- **investment-analysis**: For valuing mature public companies.
+- **predictive-burn-rate**: To see if the valuation aligns with the company's capital needs.

package/selected-skills/financeskills/skills/startup-valuation/references/berkus-method.md

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+# Berkus Method and Pre-Revenue Valuation
+
+## Berkus Method
+Assign value (0 to cap, classically $0.5M each, commonly stretched to $1M in hot markets) across five risk-reduction factors:
+| Factor | Risk Addressed | Max (classic) |
+|---|---|---|
+| Sound idea | Basic value/market risk | $0.5M |
+| Prototype | Technology risk | $0.5M |
+| Quality management team | Execution risk | $0.5M |
+| Strategic relationships | Market/competitive risk | $0.5M |
+| Product rollout / early sales | Production risk | $0.5M |
+Pre-money = sum (classic ceiling $2.5M pre-revenue). Calibrate the per-factor cap to local market norms — Lagos ≠ Bay Area.
+
+## Scorecard (Payne) Method
+Start from median pre-money of comparable local seed deals (M), multiply by weighted factor comparison vs. the "average" startup:
+- Team 30%, Market size 25%, Product/tech 15%, Competition 10%, Marketing/partnerships 10%, Need for funding 5%, Other 5%.
+`Valuation = M × Σ(weight × company rating / average)` where rating 1.0 = average.
+
+## Risk Factor Summation
+Median comp valuation ± $250K per factor across 12 risks (management, stage, political, manufacturing, sales, funding, competition, technology, litigation, international, reputation, exit), each rated −2 to +2.
+
+## Usage Notes
+- These methods price the ROUND, not the company — they exist to anchor negotiation where DCF is meaningless.
+- Always triangulate ≥ 2 methods + recent comparable rounds.
+- Document ratings rationale; investors will challenge each factor.

package/selected-skills/financeskills/skills/startup-valuation/references/vc-method.md

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+# The Venture Capital Method
+
+## Core Logic
+Work backwards from exit:
+1. **Exit value** = projected exit-year metric × comparable multiple (e.g., year-5 revenue 50M × 6x EV/Revenue = 300M).
+2. **Required future stake** = investment × (1 + target return)^n / exit value. VCs use 10x (seed), 5–7x (A), 3–5x (B+) in lieu of discount rates — the multiple embeds failure probability.
+3. **Post-money today** = exit value / (1 + target return)^n  (equivalently: investment / required stake).
+4. **Pre-money** = post-money − investment.
+
+## Worked Example
+2M seed investment, 10x target, exit value 300M in 6 years:
+- Required exit proceeds = 20M → required stake = 20/300 = 6.7% at exit.
+- **Dilution adjustment**: future rounds will dilute the seed holder. If expecting 40% cumulative dilution, required today's stake = 6.7% / (1 − 0.40) = 11.1%.
+- Post-money = 2M / 11.1% = 18M; pre-money = 16M.
+
+## Dilution Adjustment (the step everyone forgets)
+`Required current % = required exit % / (1 − expected cumulative dilution)`
+Typical per-round dilution 15–25%; seed-to-exit cumulative often 40–60%. Also reserve ESOP expansion (usually pre-money, hitting existing holders).
+
+## Cross-Checks
+- Implied ownership vs. market norms (seed 10–20%, A 15–25%).
+- Exit value sanity: does it require implausible market share?
+- Compare against scorecard/Berkus (pre-revenue) and comparable round pricing.

package/selected-skills/financeskills/skills/statement-preparation/EXAMPLE.md

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+# Worked Example - statement-preparation
+
+## Ask
+
+> Here is our Trial Balance. Can you prepare the P&L and Balance Sheet? We also need to record $5k in depreciation.
+
+## What a correct response contains
+
+Should validate the Trial Balance (Debits=Credits). Should record the $5k adjusting entry for depreciation. Should map accounts to the Income Statement and Balance Sheet. Should ensure Net Income flows into Retained Earnings. Should provide the full Financial Statement Package.
+
+## File-driven variant
+
+With fixture(s) `evals/files/movement_data.csv`:
+
+> Prepare an indirect-method cash flow statement from the attached movement data (evals/files/movement_data.csv): CFO with working-capital adjustments, CFI, CFF, and prove closing cash.
+
+Expected: CFO $2,238,000; CFI $-3,100,000; CFF $1,562,000; closing cash $4,200,000.
+
+## Compute, don't estimate
+
+All figures above come from [`scripts/calculate.py`](./scripts/calculate.py) - import its functions rather than doing arithmetic in prose.

package/selected-skills/financeskills/skills/statement-preparation/SKILL.md

@@ -0,0 +1,86 @@
+---
+name: statement-preparation
+description: When the user wants to generate a set of financial statements (Balance Sheet, Income Statement, Cash Flow) from a trial balance. Also use when the user mentions "closing the books," "preparing financials," "producing P&L," "generating balance sheet," or "year-end reporting."
+metadata:
+  version: 1.0.0
+---
+
+# Financial Statement Preparation
+
+You are a Controller. Your goal is to transform a raw Trial Balance into an accurate, compliant set of financial statements.
+
+## Initial Assessment
+
+1. **Source Data**
+   - Do we have the full Trial Balance?
+   - Is it balanced (Debits = Credits)?
+
+2. **Reporting Framework**
+   - IFRS, GAAP, or Tax-basis?
+   - What is the reporting period?
+
+3. **Adjustments**
+   - Have all month-end accruals and deferrals been recorded?
+   - Any recent asset disposals or acquisitions?
+
+---
+
+## Preparation Framework
+
+### Priority Order
+1. **Trial Balance Validation** (Checking for balance and classification errors).
+2. **Adjusting Journal Entries** (Recording depreciation, accruals, prepayments).
+3. **Income Statement Generation** (Calculating Net Income).
+4. **Balance Sheet Generation** (Ensuring Assets = Liabilities + Equity).
+5. **Cash Flow Statement** (Using the indirect method to reconcile cash).
+
+---
+
+## Technical Preparation Steps
+
+### 1. Mapping the Chart of Accounts
+- Map every account from the Trial Balance to the correct financial statement line item.
+
+### 2. The Indirect Cash Flow Method
+- Start with Net Income.
+- Add back non-cash expenses (Depreciation/Amortization).
+- Adjust for changes in working capital (Inventory, AR, AP).
+
+### 3. Equity Reconciliation
+- Ensure that Net Income flows into Retained Earnings on the Balance Sheet.
+
+---
+
+## Output Format
+
+### Financial Statement Package
+
+**1. Income Statement**
+- Revenue, COGS, Expenses, and Net Income for the period.
+
+**2. Balance Sheet**
+- Snapshot of Assets, Liabilities, and Equity.
+
+**3. Statement of Cash Flows**
+- Operating, Investing, and Financing activities.
+
+**4. Notes to the Statements** (Brief)
+- Explanation of major line item variances or unusual items.
+
+---
+
+## Scripts
+- [calculate.py](./scripts/calculate.py): Deterministic functions for this skill's core computations. Run `python3 scripts/calculate.py` to self-test; import the functions instead of doing mental math.
+
+---
+
+## References
+- [Indirect Method Guide](./references/cash-flow-method.md): Step-by-step indirect cash flow.
+- [Adjusting Entries](./references/accruals-deferrals.md): Common year-end adjustments.
+
+---
+
+## Related Skills
+- **financial-analysis**: To analyze the statements once they are prepared.
+- **audit-checklist**: To ensure the preparation process follows internal controls.
+- **automated-reconciliation**: To ensure the cash balance on the BS matches the bank.