The development of a decision model for liquidity analysis

Abstract We present a scheme for building a decision model for analyzing the quality of short-term liquidity from domain experts. This scheme combines the model building features of both process tracing approach and output analysis approach. The process tracing component applies the Concurrent Verbal Protocol Analysis to build a decision model by tracing through verbalized decision procedures from domain experts. Its performance consistency is then verified by the application of Probability Neural Network as an output analysis method. The results of verification provide the basis for further refinement of the decision model. This scheme retains the explanation capability of the Protocol Analysis, and, at the same time, provides an opportunity for researchers to rectify some of the inherent problems associated with it.

[1]  David B. Paradice,et al.  Inductive modeling of expert decision making in loan evaluation: a decision strategy perspective , 1997, Decis. Support Syst..

[2]  Edward I. Altman,et al.  FINANCIAL RATIOS, DISCRIMINANT ANALYSIS AND THE PREDICTION OF CORPORATE BANKRUPTCY , 1968 .

[3]  Marjorie B. Platt,et al.  Probabilistic Neural Networks in Bankruptcy Prediction , 1999 .

[4]  Donald F. Specht,et al.  Probabilistic neural networks and the polynomial Adaline as complementary techniques for classification , 1990, IEEE Trans. Neural Networks.

[5]  L. Bernstein.  Financial statement analysis : theory, application and interpretation , 1993 .

[6]  O. Svenson.  Process descriptions of decision making. , 1979 .

[7]  Pamela K. Coats,et al.  A neural network for classifying the financial health of a firm , 1995 .

[8]  K. A. Ericsson,et al.  Protocol Analysis: Verbal Reports as Data , 1984 .

[9]  D. F. Specht,et al.  Enhancements to probabilistic neural networks , 1992, [Proceedings 1992] IJCNN International Joint Conference on Neural Networks.

[10]  E. Parzen.  On Estimation of a Probability Density Function and Mode , 1962 .

[11]  Isabel Gutierrez,et al.  A fuzzy set approach to financial ratio analysis , 1988 .

[12]  Kenneth Kotovsky,et al.  Complex Information Processing: The Impact of Herbert A. Simon , 1989 .

[13]  Herbert A. Simon,et al.  Models of Competence in Solving Physics Problems , 1980, Cogn. Sci..

[14]  Alfredo Vellido,et al.  Neural networks in business: a survey of applications (1992–1998) , 1999 .