What’s in a Name?

Have you ever wondered about the name Level1Analytics? Whether or not the name rings a bell for you, we’d like to take the time to explain the origin of our name, and how it continues to drive what we do in our work.

At the core of Level1Analytics® Powered by Intraprise lies a deep understanding of financial valuation principles. It’s those principles that inspired the name Level1Analytics, and capture our objective in serving our clients: to deliver insights that are as close to the most reliable, observable data as possible.

Some Quick Background

The Financial Accounting Standards (FAS) 157, issued by the Financial Accounting Standards Board (FASB) in 2006, defines fair value measurement and provides a framework for determining the value of assets and liabilities in accounting. Our name, Level1Analytics - born from this foundational principle - highlights our commitment to accuracy, precision, and transparency in financial analysis.

More specifically, FAS 157 establishes a three-level hierarchy for measuring fair value. Each level represents a different degree of reliability and judgment involved in the valuation process:

Level 1: This is the highest level of measurement, based on observable market prices. Assets that are actively traded, such as stocks of well-known companies like Apple, fall under Level 1. These assets are easily priced in real-time through market transactions, providing a high degree of confidence in their value.

Level 2: Assets and liabilities in this level are valued based on observable inputs, but they are not as readily marketable as Level 1assets. For example, mortgage-backed securities (MBS) might be assessed based on comparable market data. In these cases, prices from related securities are used to infer the value of an asset.

Level 3: When market prices or comparable assets are unavailable, as is often the case with more complex or unique assets, Level 3 requires a more subjective valuation, typically involving detailed cash flow analysis.

The Level1 Connection

For Level1Analytics, the name is more than just a reference to the highest level of the fair value hierarchy—it represents our mission: to strive for Level 1 valuations wherever possible. This ambition reflects our desire to provide the most accurate, reliable, and transparent financial assessments, leveraging observable market data and minimizing the need for subjective judgment. In our name, we hope to communicate our effort to provide valuation software that meaningfully reduces complexity in your financial data; we aim to bring all valuations closer to the clarity and confidence that Level 1 represents.

Why Level 1 Matters

In the context of fair value accounting, Level 1 is the gold standard. It offers the highest degree of confidence in pricing, based on real-time market data. For Level1Analytics, our name choice reflects our drive to push the boundaries of financial analysis, ensuring that clients can rely on clear, accurate, and easily understandable valuations. This commitment to transparency and precision is what sets us apart in an increasingly complex financial landscape.

Ultimately, the name Level1Analytics isn’t just about using a technical financial term—it’s about adopting a philosophy of continuous improvement and striving for the highest standards in the industry. The name embodies our promise: to deliver insights that are as close to the most reliable, observable data as possible.