However, there is some flexibility which allows for special situations, based on the input consisting of proportions A or means B.
In general, the forces of competition are imposing a need for more effective decision making at all levels in organizations. Progressive Approach to Modeling: Modeling for decision making involves two distinct parties, one is the decision-maker and the other is the model-builder known as the analyst.
Therefore, the analyst must be equipped with more than a set of analytical methods. Specialists in model building are often tempted to study a problem, and then go off in isolation to develop an elaborate mathematical model for use by the manager i.
Unfortunately the manager may not understand this model and may either use it blindly or reject it entirely. The specialist may feel that the manager is too ignorant and unsophisticated to appreciate the model, while the manager may feel that the specialist lives in a dream world of unrealistic assumptions and irrelevant mathematical language.
Such miscommunication can be avoided if the manager works with the specialist to develop first a simple model that provides a crude but understandable analysis.
After the manager has built up confidence in this model, additional detail and sophistication can be added, perhaps progressively only a bit at a time. This progressive model building is often referred to as the bootstrapping approach and is the most important factor in determining successful implementation of a decision model.
Moreover the bootstrapping approach simplifies otherwise the difficult task of model validating and verification processes.
What is a System: Systems are formed with parts put together in a particular manner in order to pursuit an objective. The relationship between the parts determines what the system does and how it functions as a whole.
Therefore, the relationship in a system are often more important than the individual parts. In general, systems that are building blocks for other systems are called subsystems The Dynamics of a System: A system that does not change is a static i.
Many of the systems we are part of are dynamic systems, which are they change over time. Whether a system is static or dynamic depends on which time horizon you choose and which variables you concentrate on.
The time horizon is the time period within which you study the system. The variables are changeable values on the system. In deterministic modelsa good decision is judged by the outcome alone.
However, in probabilistic models, the decision-maker is concerned not only with the outcome value but also with the amount of risk each decision carries As an example of deterministic versus probabilistic models, consider the past and the future: Nothing we can do can change the past, but everything we do influences and changes the future, although the future has an element of uncertainty.
Managers are captivated much more by shaping the future than the history of the past. Uncertainty is the fact of life and business; probability is the guide for a "good" life and successful business.
In very few decision making situations is perfect information - all the needed facts - available. Most decisions are made in the face of uncertainty.Basic Financial Management and Ratio Analysis for MFIs page iii MicroSave – Market-led solutions for financial services Team Activity – A “Financial Bee” Ratios and Trends – Sample Answers.
Sensitivity Analysis: MFI Basic Financial Management and Ratio Analysis for MFIs Section 1 - 1. The detailed ratio analysis reports include charts depicting several key ratios that are available to incorporate into your client reports or to customize to fit your client's specific needs.
Note: You can use the programs Report Designer to copy and modify any of the standard reports or to. The solvency ratio used, which was the debt to total assets ratio, showed that during and Kudler only had around a quarter of their assets financed in debt.
All of these ratios show that Kudler was a fairly strong company financially during and This work was produced by one of our professional writers as a learning aid to help you with your studies.
Published: Thu, 15 Mar Financial statements are useful as they can be used to predict future indicators for a firm using the financial ratio analysis.
The Current Ratio, Liquid Ratio and Absolute Liquidity Ratio generally indicate the adequacy of current assets for meeting current liabilities. This is one dimension of liquidity analysis. The other dimension of liquidity is the determination of the rate at which various short-term assets are converted into cash.
Ratio Analysis of Financial Statements – This is the most comprehensive guide to Ratio Analysis / Financial Statement Analysis This expert-written guide goes beyond the usual gibberish and explore practical Financial Statement Analysis as used by Investment Bankers and Equity Research Analysts.