Distress Flag Validation for A-CFVI-Ops Using Historical Financial Data

This document provides validation results for the Distress Flag criteria within the Alaali Cash Flow Volatility Index Operational Model (A-CFVI-Ops). Utilizing historical financial data (2019–2023) from Alba and Alcoa, we applied explicit distress criteria based on Interest Coverage Ratio (ICR), Return on Assets (ROA), and EBITDA Margin. This validation process clearly tested the real-world applicability and robustness of the distress flagging system, affirming the practical utility and reliability of the A-CFVI-Ops model in accurately identifying periods of financial distress.