Abstract
The article presents an approach to integrate a business process knowledge in Decision Support Systems. The main research findings are related to the ontological and procedural issues of knowledge specification. The mathematical rigor used in process descriptions guarantees for precise definition of concepts and relationships in the domain knowledge. It concerns three major aspects of the system design, i.e. formalization of processes predefined in Business Process Modeling Notation, reuse of a domain ontology, and analysis of economic and financial information. Formally specified analytical processes and ontology allowed considerably minimize sources of ambiguity and confusion in the system design and implementation. The described approach is a continuation of the development of the intelligent cockpit for managers (InKoM project), whose main objective was to facilitate financial analysis and evaluation of economic status of the company. The current work and case studies are focused on specification of static (structural) and procedural knowledge of financial analysis in Small and Medium Enterprises. The content of the knowledge covers essential financial concepts and relationships related to the processes of emergency policy. An experiment has been carried out on real financial data extracted from the financial information system.
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Notes
- 1.
BPAL was developed within EU FP7 Business Innovation and Virtual Enterprise Environment (BIVEE): modeling of production processes in manufacturing oriented networked-enterprises.
- 2.
In the literature there are target ratios discussed. It is generally considered necessary to maintain a ratio of equity to liabilities of 1:1. The quick ratio should be maintained at a minimum level of 120%.
- 3.
According to Table 1, in 2016 Debt to Equity ratio = [(1300 + 320)/(600 + 30 − 90)] * 100 = 225%.
- 4.
Detailed analysis of banking credit conditions leads to search for other solutions. Banks use credit rating as a basis for credit decisions. The results and forecasts presented in Table 1 show that the surveyed company has no ability to repay the loan, and its credit standing is also poor. The rating methodology identifies companies whose liabilities significantly exceed their equity and systematically suffer a loss and thus are “permanently incapable of meeting their liabilities”. The root causes of the low credit rating is the data included in Table 1, in particular, growing liabilities and a significant loss. Any bank, following the credit rating methodology, will consider such a result as the basis of issuing a negative credit decision.
- 5.
Acquisition of aid funds is followed by a complex administrative procedure. Contests are not always announced on a continuous basis and not all entrepreneurs can apply for a particular call. Aid funds very often place additional requirements with regard to the need to transfer ownership rights to the effects of a project’s implementation. Moreover, material liability associated with inappropriate use of funds is a problem for managers. Entering the contest may ultimately result in the bankruptcy of the business as a result of the sanctions entered in the contest rules.
- 6.
Creditors who decide to convert debts into debtor’s equity analyze their ability to recover the invested funds. In case of legal insolvency proceedings, they rarely recover more than half of the funds involved. If they decide to convert debt into equity they must be prepared for the possibility of losing the whole. Therefore, the decision to convert is preceded by hard negotiations. A common requirement is to favor shares that will be issued by reducing debt. Existing owners will not always accept these terms, as this can result in loss of control.
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Acknowledgement
The authors would like to thank Maurizio Proietti from National Research Council, IASI Rome, for his comments and assistance to run the analytical processes using BPAL platform.
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Korczak, J., Dudycz, H., Nita, B., Oleksyk, P. (2018). Semantic Approach to Financial Knowledge Specification - Case of Emergency Policy Workflow. In: Ziemba, E. (eds) Information Technology for Management. Ongoing Research and Development. ISM AITM 2017 2017. Lecture Notes in Business Information Processing, vol 311. Springer, Cham. https://doi.org/10.1007/978-3-319-77721-4_2
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