An Expert System for Cash Flow Analysis

This article describes an expert system for cash flow analysis called CFA--Cash Flow Analyzer. which uses knowledge based on ratio analysis and the budgetary statement of changes in cash flow. The system uses "If ••• Then ••• " rules to capture the expertise necessary to diagnose the source of cash flow problems and make recommendations on how to mitigate those problems. 1. AN EXPERT SYSTEM FOR CASH FLOW ANALYSIS One of the most important problems facing management is managing cash. Cash is the "life blood" of the organization. Inappropriate management of cash may cause difficulty with creditors and may even lead to bankruptcy. Thus. cash flow analysis is a critical concern of management. Cash flow analysis is concerned with budgeting cash flows and with diagnosing the causes of positive and negative changes in cash flows. It is used to diagnose potential cash flow problems and plan solutions to managing the firm's cash flows. The purpose of this paper is to discuss an expert system for cash flow analysis. The system. CFA--CASH FLOW ANALYZER. uses rules based on ratio analysis and the budgetary statement of changes in cash flow to budget cash flow. diagnose the source of cash flow problems and make recommendations on how to mitigate those problems. 2. RECENT DEVELOPMENTS IN EXPERT SYSTEMS Artificial intelligence can be defined as the study of how to make computers exhibit the characteristics associated with intelligence in human behavior. It includes the simulation of human activities such as robotics. natural language. vis\on systems and expert systems (Ref. 1). Expert systems perform tasks normally done by knowledgeable human experts. They are developed by programming the computer to make decisions using some of the processes and knowledge of the human expert. Expert systems usually have five major components: knowledge acquisition subsystem. knowledge base. inference engine. explanation module and the language interface (Ref. 2). The knowledge acquisition