Application of fuzzy logic methods to determine the integral indicator of financial stability of enterprises

Abstract

Introduction.This article іs prepared according to the research of  the mechanism of formation of enterprises’ economic sustainability on the basis of a fundamentally new approach to their structuring: four types of subsystems are allocated according to their spatiotemporal localization. The theoretical analyses has allowed us to hypothesize that the level of economic sustainability is agreed upon the level of balance of enterprises’ four subsystems and may be determined on the basis of its estimation. For empirical verification of the hypothesis it is advisable to compare such evaluations with the estimations of finance and economic stability level of enterprises on the basis of the ratios which are traditionally used as its indicators. This, in its turn, causes the necessity to develop the method of convolution.

The research is conducted within the project “Development of an online platform of analysis and scenario planning of Ukrainian regions’ sustainability in the context of the quality and safety of human life” (ID: 65810 29.08.2016 (378-1)), supported by the state budget main fund.

Purpose.This aim of article is ground the author's approach the determination of the integral indicator of financial stability through the application of fuzzy logic methods and its correlation analysis with previously obtained estimates of system balance of machine-building enterprises.

Methods (methodology).The theoretical and methodological foundations of the research are formed in the context of the new neo-system economic paradigm. General scientific methods, such as method of analysis and synthesis, induction and deduction methods, are applied to do this. The specific methods of Data Mining Technology, including Principal Component Analysis and Fuzzy Logic are applied to conduct the empirical research.

Results.The application of fuzzy logic has allowed us to convolute financial ratios and to determine the integral indicator of enterprises’ financial stability on their basis. The strong linear relationship between values of the indicator and values of the index of enterprises’ system balance for a number of machine-building enterprises for the period of 2004-2015 is demonstrated. The hypothesis of the research is confirmed.