Implementing control charts to corporate financial management

In the paper, corporate financial management using statistical process control (SPC), especially Shewhart’s control charts operating with the constant mean, control charts with non-constant mean, and process capability indices will be introduced. The center line, UCL and LCL for the control charts will be defined with the regulated process not allowed to cross the UCL and LCL boundaries. Altman’s model (the so called Z-score), the most popular corporate financial stability index, will be used. We will demonstrate benefits of SPC on two case studies: the first will focus on corporate financial flow control, the second will include six companies. Special types of control charts, i.e., CUSUM and EWMA, will be discussed due to their mean shift sensitivity and practical applications demonstrated on additional two case studies. The results prove control charts can be successfully implemented not only in manufacturing processes but in corporate financial management as well. Key–Words: Altman’s Z-score, Statistical Process Control, Shewhart’s control charts, process capability indices, EWMA control chart, CUSUM control chart