The Finance Index

Is there any documentation or does anyone have any information regarding the computation of the Finance Index?

-Tendo

The Finance Index is simply the ratio of income vs expenditure. Nothing more, nothing less. The higher the ratio, the higher the index. However, the index number does not literally translate into the ratio, because the GM has tampered a bit with it. Example: when having 150 Financial Index it does not mean your income is 1,5 times your expenses - it's actually somewhat lower. Another example: When having a ratio of 3:1 (let's say 150 income, 50 expense) your FI will look more like 180 instead of 300.

However, on the lower end, numbers are more accurate. A FI of 100 means you're breaking even and below 100 means you're in the red. The numbers start to become skewed after 150 I think. To reach a FI of 200 it would take something like a 5:1 ratio of income vs expenditure (I seriously doubt anyone could achieve that).

Anyway, the only thing that's for certain (as the GM have many times declared) is that the only thing that matters is this ratio. How they compute it, well that's another issue... Hope that helps.

<!-Quote-!>Quote:

Jo Salkilld (White Giant)


Tuesday, August 9, 2011 - 12:30 am Click here to edit this post
The following is a copy of an email I received from the GMs a while ago, when I asked exactly the same question:

You asked about one of the most complex indexes indeed.

The most important factors are total income and cost.

The main factor is computed as:

1.3 total income this year + total income last year Divided by (you probably guessed)
1.3 total cost this year + total income last year.

There are some smoothing factors too, preventing sudden changes that occur all the time. The change of year causes a change in the index, because of the changing definition of this year and last year.

so the index is n times the current value plus the new value, divided by n+1.

n I remember as 6 or 7.

There are also some smaller corrections and measures that prevent a division by a very small number and a small factor that makes it more difficult to get into the hundreds, adding a small division factor. all this does not prevent the finance index from becoming very high.

There is no dependency at all on cash or assets as you could buy those for money.

Hugs and respect

Jo<!-/Quote-!>

i found it under an old thread titled "How is finiace index calcuated? (Fearless Blue)" and in my search, i found a newer thread where Jo was asking for this formula to be published, so i don't know, but its the best i can do. their is an extra part to the FI that gives an advantage to larger economies, with higher costs, or at least their used to be, so that if your total cost was less than 100B you couldn't get much above 150 FI. although i think that they've relaxed that, not entirely sure

Many thanks for the information. This index frustrates me somewhat! I have a large economy with healthy finances, yet small countries that receive the new player boost constantly have higher finance indexes than me.

With a stable and profitable economy I cannot get my finance index above around 188. :-/