Usage of Data Mining at Financial Decision Making

The knowledge age requires controlling every kind of information. Recognition of patterns in data may provide previously unknown and useful information that can provide competitive advantages. If related techniques are applied on financial statements, it is possible to acquire valuable information about companies’ financial situations. It is considered that data mining could be an alternative of common financial analysis techniques such as vertical analysis, horizontal analysis, trend analysis and ratio analysis. Against existing financial analysis methods, data mining provides some advantages, which are ability of manipulation of huge data and competence of obtaining previously unknown information. There exist two major constraints of data mining implementation that are lack of experts on both data mining and related domains and cost of computer software and hardware used.