Development of Financial Analysis Based on the Theory of Fuzzy Sets

Abstract

The article proposes the authors’ model of financial analysis of an organization built upon the fuzzy set theory, and the results of its application. To improve the financial stability of a company and reduce risks, it is proposed to introduce a linguistic variable and divide the set of its values into term sets. Based on the fuzzy set theory, evaluate the membership function as a measure of the truth of a term. It is suggested that financial performance indicators be monitored by constructing trapezoid fuzzy numbers and using the equations for the membership function of a trapezoidal fuzzy number. Each indicator of a company’s financial position is a numeric variable and, therefore, is regarded by the authors as a carrier of a linguistic variable consisting of given terms. Assuming that financial indicators have the same weight, the weights of each term of the linguistic variable are calculated. From the obtained results, a conclusion is made about the financial position of a company. The suggested model of financial analysis helps reduce environmental uncertainty, improve predictive accuracy, and reduce human and time resources, which is of great importance in the current context of economic development.