Developing an Adaptive Fuzzy Controller for Risk Management of Company Cash Flow

This study is part of research from corporate governance domain, knowing that one of the major concerns of stakeholders is to identify decisions that ensure adequate control over costs and hence over the risk of cash flow, in order to ensure a high level of performance. The immediate consequence is that the decision to control the risk of cash flow has impact on the market value of the listed companies. In this context, the paper addresses the issue of cash flow risk in terms of leverage, except that the debt service of a company is often a “fixed cost” and the company has a certain level of affordability of this cost. This level of cost affordability for capital is determined by the existence of the free cash flow available for being used in subsequent reimbursement of the borrowed capital. Moreover, since the free cash flow has a certain evolution during the period the capital has to be repaid, the question of maintaining security in the debt service of free cash flow is raised. The objective of this study is achieved using a fuzzy adaptive controller.