Mutual Debts Compensation as Graph Theory Problem
Vladimír Gazda · Mathematical Finance · 2001
The article deals with a serious problem of many postcommunist countries i.e. firms’ financial insolvency as a result of their mutual debts. Some authors proposed graph theory application in solution of the problem. Creditor - debtor relationship is modelled by a digraf of unpayable debtsG = (V Ey), where the set of vertices V represents the firms and the set of edges E represents the creditor—debtor relationship. Function y assigns positive value of debt to each of the edges. The role of ministry of finance in mutual debts compensation process is discussed in the article.