LOGIC-BASED SYSTEM FOR EALUATION OF CORPORATE FINANCIAL PERFORMANCE

Abstract

In corporate performance evaluation one of the most critical issues that needs to be considered is the financial aspect of a company. For the purpose of financial evaluation various indicators and performance measures are applied and they can serve as a basis for development of different evaluation systems. Thus, the problem of financial evaluation is regarded as a multi criteria decision making problem where total assessment is obtained by means of different aggregation methods (e.g. weighted sum, OWA, etc.). Traditional methods, contrary to logic-based approach, are not able to account for complex dependences that may occur in the problems where human factor is included. Using logical expressions it is possible to mathematically model decision maker’s preferences, demands and experience which are described by linguistic expressions close to human reasoning. When it comes to financial data, both statistical and logical dependences can be recognized. Therefore, logic-based approach may be appropriate for solving financial problems. In this paper, a system for evaluation of corporate financial performance and its software support are proposed. The central part of the system refers to the method of logical aggregation based on interpolative Boolean algebra. The results of the companies analyzed in the paper are also presented.