Prediction of financial distressed based on the theory of rough sets compared to artificial neural networks
Quarterly Journal of Securities Exchange

Quarterly Journal of Securities Exchange

Prediction of financial distressed based on the theory of rough sets compared to artificial neural networks

Document Type : Original Article

Authors
1 M.Sc. Department of Financial Management, Urmia University, Urmia, Iran
2 Associate Professor, Department of Accounting, Urmia University, Urmia, Iran.
3 Assistant Professor, Department of Accounting, Urmia University, Urmia, Iran
Abstract
In the era when companies are facing many challenges to survive in competitive markets, it is important to identify the factors affecting financial crises. One of the ways to help investors and companies is to provide models to predict financial distress. The purpose of this research is to investigate the ability of rough set theory and compare it with artificial and fuzzy neural networks to predict the financial distress of companies active in the Tehran Stock Exchange. For this purpose, 329 distressed companies from non-distressed corporations were selected during the period of 2006 to 2020. The neural networks investigated in this research are: Multi-layer Perceptron (MLP) neural network, Radial Basis Function (RBF) network, and Adaptive Fuzzy Inference Network (ANFIS) as well as the software used to create the ROSETTA rough set and the software The tool used to design artificial and fuzzy neural networks is MATLAB software. The results obtained in this research show the high efficiency of the rough sets model with 98/7 percent accuracy for predicting financial distress.
Keywords
Subjects

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