Calcbench Looks to Help Budget-Minded Analysts Crunch Financial Data
Calcbench, a new startup working out of Cambridge, MA and New York, came to being from an app design challenge put on by the people behind XBRL, a technology standard the SEC requires public companies to use in reporting financial data.
Yes, the terms app challenge and SEC did in fact appear in the same sentence. XBRL, which stands for extensible business reporting language, was developed by the SEC and the Financial Accounting Standards Board (FASB) as one of many measures to improve financial transparency among publicly traded companies. But there’s even more that can come of the XBRL use, says Calcbench co-founder Pranav Ghai, who’s based in New York.
“Nobody seems to be using the data once it’s there,” says Ghai.
So the small team at XBRL put out the call to app developers to build tools that analyze the data companies are required to report. “People are reporting the information because they have to, not because they want to,” and this contest is out to bring some more life to the system, says Calcbench co-founder Alex Rapp.
Rapp, who works out of Cambridge’s Dogpatch Labs, had been working on his own startup, Collaborative Reasoning, when he reunited with former college roommate Ghai. Both have backgrounds in the finance world, and decided to take a shot at the XBRL Challenge in August.
The Calcbench app, released Friday, plugs into the XBRL data to access quarterly documents such as earnings statements, cash flow statements, and company balance sheets. Users enter a ticker to access that information for a particular company, and Calcbench’s engine pulls all the information into a more readable, interactive format. (The SEC’s EDGAR system has also begun to display this data more interactively.)
Calcbench also plugs in its own custom calculations such as debt to equity ratios and operating margins to go beyond the information reported in the filing. Users can compare the data to past quarters or past years, and can also compare it to other companies. They can also leave notes on the documents to share with others, a collaboration artifact of Rapp’s previous project, Collaborative Reasoning, which was developing plug-ins for group collaboration on Microsoft Outlook. (That hasn’t yet captured an audience and is on the back burner for now, says Rapp.)
The financial information is already accessible through existing but very expensive financial data services, like Bloomberg and Thomson Reuters, which aren’t a realistic option for individual users like freelance financial journalists. Calcbench is also targeting lawyers, accountants, investors, and financial analysts. Those looking to access the information on their own have typically had to go through the SEC website manually. Calcbench is also different in that it pulls directly from the company-supplied data, while other analytical tools rely on third party information. That means it’s also subject to the errors companies make when reporting the information, but the Calcbench engine can help catch those mistakes and inform XBRL, says Rapp.
Other startups have tackled the concept of making sophisticated financial data more accessible. Screener.co sells its financial analytical tool, using calculations built on on ThomsonReuters data, for $24.95 per month to personal users and $49.95 to professional users.
Calcbench is vying for a $20,000 grand prize that XBRL Challenge will award in February. But Ghai and Rapp are looking for the app to have life beyond that. The hope is that the tool will be able to support itself through display ads. It’s initially looking to add networks to serve those, but will target more strategic financial services advertisers if it gets enough momentum. Calcbench could also make money off a premium offering that includes more specialized calculations for the data, and it could develop it for individual broker dealer firms to use as their own branded tool, says Rapp.