Applying the theory of chaos and a complex model of health to establish relations among financial indicators | Zendy

Fernando Juárez | Zendy

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Applying the theory of chaos and a complex model of health to establish relations among financial indicators

Author(s) -

Fernando Juárez

Publication year - 2011

Publication title -

procedia computer science

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 0.334

H-Index - 76

ISSN - 1877-0509

DOI - 10.1016/j.procs.2010.12.161

Subject(s) - computer science , variance (accounting) , profit (economics) , econometrics , cash flow , chaos theory , finance , mathematics , economics , chaotic , microeconomics , artificial intelligence , accounting

They were applied the chaos theory and a complex model of health to determine relationships among aggregate indicators of financial statements. Cash flow, profit and loss, and assets of 70 companies in the sector of crude oil mining and natural gas in Colombia, were analyzed. Natural logs and Lorenz equation were applied to transform cash flow, profit and loss, and assets, resulting in an explained variance of 73% in the linear regression among the new complex indicators. The explained variance without transformations was 6%. However, these transformations make it more difficult to interpret the financial indicators

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