All large financial datasets have multiple problems such as data entry errors (e.g., negative amounts of assets and liabilities) or totals of assets, liabilities and equity not adding up. To deal with these data problems, IndustriusCFO has developed a cleaning routine that includes over two hundred checkpoints applied to each financial statement. Rather than using list-wise deletion and removing problematic statements altogether, which would reduce the representativeness of the data, the IndustriusCFO procedure imputes the problematic or missing values using complex formulas of weighted averages. The components and weights included in the calculations vary depending on the availability and quality of the relevant data.
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