Hybrid genetic algorithm and fuzzy clustering for bankruptcy prediction

Gudermannian neural network procedure for the nonlinear prey-predator dynamical system

The present study performs the design of a novel Gudermannian neural networks (GNNs) for the nonlinear dynamics of prey-predator system (NDPPS). The process of GNNs is applied using the global and local search approaches named as genetic algorithm and interior-point algorithms, i.e., GNNs-GA-IPA. An error-based merit function is constructed using the NDPPS and its initial conditions and then optimized by the hybrid of GA-IPA. Six cases of the NDPPS using the variable coefficients have been presented and the correctness is observed through the overlapping of the obtained and Runge-Kutta reference results. The results of the NDPPS have been performed between 0 and 5 using the step size 0.02. The graph of absolute error are performed around 10-06 to 10-08 to check the consistency of the proposed GNNs-GA-IPA. The statistical analysis based minimum, median and semi-interquartile ranges have been performed for both predator and prey dynamics of the model. Moreover, the investigations through the statistical operators are performed to validate the reliability of the obtained outcomes based on multiple trials.

A test paper generation algorithm based on diseased enhanced genetic algorithm

With the continuous progress of society, tests, and exams appear more and more frequently in people's lives. Faced with the ever-increasing demand for test papers, efficient test paper generation algorithms have become more important. In this paper, we improved and proposed a Diseased Enhanced Genetic Algorithm (DEGA) based on the Genetic Algorithm (GA), and applied it to the test paper generation algorithm. I the crossover operator, the crossover probability that will change in different situations of the population is adopted. According to the characteristics of the test paper generation algorithm, we use the method based on the hamming distance to calculate the distance between individuals in the population. Aiming at the shortcoming that the mutation operator is too random, we designed and used a disease operator that includes three modules: natural disease, infection, and mutation. It effectively guarantees the distance between individuals in the population and improves the shortcoming that GA is easy to fall into a locally optimal solution. Finally, using the College English Test Band 4 (CET-4) questions from 2014 to 2021 as the data set, comparative experiments were carried out on the test paper generation algorithm based on Random Sampling Algorithm (RSA), GA, Enhanced Genetic Algorithm (EGA) and DEGA. The results show that when using the test paper generation algorithm based on DEGA, the generation of test papers is faster, the number of iterations is less, and the algorithm results are significantly better than other algorithms.

A Technology Watch/Competitive Intelligence–based Decision-Support System optimised with Genetic Algorithms

To survive and prosper in a highly competitive environment where uncertainty and ambiguity are the norm, today’s firms are faced with the need for new information management methods and tools. Two of the most prominent strategies that take information and its treatment as a value-generating element in firms’ decision-making are Technology Watch and Competitive Intelligence. In addition, one of the fundamental components that a system based on these strategies must have is an efficient method of Information Retrieval. The present study describes a Competitive Intelligence–based decision-support system that uses a Genetic Algorithm. The system contributes to improving information retrieval through search optimisation, thus enhancing the performance of this knowledge-generating tool for organisations.

A Novel Adaptive Kernel Picture Fuzzy C-Means Clustering Algorithm Based on Grey Wolf Optimizer Algorithm

Over the years, research on fuzzy clustering algorithms has attracted the attention of many researchers, and they have been applied to various areas, such as image segmentation and data clustering. Various fuzzy clustering algorithms have been put forward based on the initial Fuzzy C-Means clustering (FCM) with Euclidean distance. However, the existing fuzzy clustering approaches ignore two problems. Firstly, clustering algorithms based on Euclidean distance have a high error rate, and are more sensitive to noise and outliers. Secondly, the parameters of the fuzzy clustering algorithms are hard to determine. In practice, they are often determined by the user’s experience, which results in poor performance of the clustering algorithm. Therefore, considering the above deficiencies, this paper proposes a novel fuzzy clustering algorithm by combining the Gaussian kernel function and Grey Wolf Optimizer (GWO), called Kernel-based Picture Fuzzy C-Means clustering with Grey Wolf Optimizer (KPFCM-GWO). In KPFCM-GWO, the Gaussian kernel function is used as a symmetrical measure of distance between data points and cluster centers, and the GWO is utilized to determine the parameter values of PFCM. To verify the validity of KPFCM-GWO, a comparative study was conducted. The experimental results indicate that KPFCM-GWO outperforms other clustering methods, and the improvement of KPFCM-GWO is mainly attributed to the combination of the Gaussian kernel function and the parameter optimization capability of the GWO. What is more, the paper applies KPFCM-GWO to analyzes the value of an airline’s customers, and five levels of customer categories are defined.

A hybrid model with novel feature selection method and enhanced voting method for credit scoring

With the in-depth application of artificial intelligence technology in the financial field, credit scoring models constructed by machine learning algorithms have become mainstream. However, the high-dimensional and complex attribute features of the borrower pose challenges to the predictive competence of the model. This paper proposes a hybrid model with a novel feature selection method and an enhanced voting method for credit scoring. First, a novel feature selection combined method based on a genetic algorithm (FSCM-GA) is proposed, in which different classifiers are used to select features in combination with a genetic algorithm and combine them to generate an optimal feature subset. Furthermore, an enhanced voting method (EVM) is proposed to integrate classifiers, with the aim of improving the classification results in which the prediction probability values are close to the threshold. Finally, the predictive competence of the proposed model was validated on three public datasets and five evaluation metrics (accuracy, AUC, F-score, Log loss and Brier score). The comparative experiment and significance test results confirmed the good performance and robustness of the proposed model.

Deep Learning Based on Hierarchical Self-Attention for Finance Distress Prediction Incorporating Text

To detect comprehensive clues and provide more accurate forecasting in the early stage of financial distress, in addition to financial indicators, digitalization of lengthy but indispensable textual disclosure, such as Management Discussion and Analysis (MD&A), has been emphasized by researchers. However, most studies divide the long text into words and count words to treat the text as word count vectors, bringing massive invalid information but ignoring meaningful contexts. Aiming to efficiently represent the text of large size, an end-to-end neural networks model based on hierarchical self-attention is proposed in this study after the state-of-the-art pretrained model is introduced for text embedding including contexts. The proposed model has two notable characteristics. First, the hierarchical self-attention only affords the essential content with high weights in word-level and sentence-level and automatically neglects lots of information that has no business with risk prediction, which is suitable for extracting effective parts of the large-scale text. Second, after fine-tuning, the word embedding adapts the specific contexts of samples and conveys the original text expression more accurately without excessive manual operations. Experiments confirm that the addition of text improves the accuracy of financial distress forecasting and the proposed model outperforms benchmark models better at AUC and F2-score. For visualization, the elements in the weight matrix of hierarchical self-attention act as scalers to estimate the importance of each word and sentence. In this way, the "red-flag" statement that implies financial risk is figured out and highlighted in the original text, providing effective references for decision-makers.

Key Ratios for Long-Term Prediction of Hotel Financial Distress and Corporate Default: Survival Analysis for an Economic Stagnation

Hospitality companies often face economic crises, which stress their financial structure. In 2008, Spanish hotels were jeopardized when the travelers’ flows became stagnated, in either domestic and foreign markets. Most of them overcame the crisis, but not all, in part depending on their capital structure at the moment the downturn loomed upon them. This study analyzes the financial ratios registered in 2008 by 3.341 Spanish lodging enterprises, to find out the most relevant ratios that were associated with an eventual breakdown. The analyzed ratios have been largely suggested by previous literature for anticipating financial distress; however, using survival tables and Kaplan–Meier estimates we could also find new insights about several promising variates for future research. In the end, by performing a Cox regression, we could isolate the return on capital employed (ROCE) ratio as a long-term predictor for small hotels’ bankruptcy after a market downturn. Moreover, the legal status seems to be a key predictor concerning medium-sized hotels.

Predicting Financial Distress of Slovak Enterprises: Comparison of Selected Traditional and Learning Algorithms Methods

Predicting the risk of financial distress of enterprises is an inseparable part of financial-economic analysis, helping investors and creditors reveal the performance stability of any enterprise. The acceptance of national conditions, proper use of financial predictors and statistical methods enable achieving relevant results and predicting the future development of enterprises as accurately as possible. The aim of the paper is to compare models developed by using three different methods (logistic regression, random forest and neural network models) in order to identify a model with the highest predictive accuracy of financial distress when it comes to industrial enterprises operating in the specific Slovak environment. The results indicate that all models demonstrated high discrimination accuracy and similar performance; neural network models yielded better results measured by all performance characteristics. The outputs of the comparison may contribute to the development of a reputable prediction model for industrial enterprises, which has not been developed yet in the country, which is one of the world’s largest car producers.

Corporate Bankruptcy Prediction Model, a Special Focus on Listed Companies in Kenya

Predicting bankruptcy of companies has been a hot subject of focus for many economists. The rationale for developing and predicting the financial distress of a company is to develop a predictive model used to forecast the financial condition of a company by combining several econometric variables of interest to the researcher. The study sought to introduce deep learning models for corporate bankruptcy forecasting using textual disclosures. The study constructed a comprehensive study model for predicting bankruptcy based on listed companies in Kenya. The study population included all 64 listed companies in the Nairobi Securities Exchange for ten years. Logistic analysis was used in building a model for predicting the financial distress of a company. The findings revealed that asset turnover, total asset, and working capital ratio had positive coefficients. On the other hand, inventory turnover, debt-equity ratio, debtors turnover, debt ratio, and current ratio had negative coefficients. The study concluded that inventory turnover, asset turnover, debt-equity ratio, debtors turnover, total asset, debt ratio, current ratio, and working capital ratio were the most significant ratios for predicting bankruptcy.

A bibliometric study on intelligent techniques of bankruptcy prediction for corporate firms

Bibliometric analysis is an effective method to carry out quantitative study of academic output to address the research trends on a given area of investigation through analysing existing documents. This paper aims to explore the application of intelligent techniques in bankruptcy predictions so as to assess its progress and describe the research trend through bibliometric analysis over the last five decades. The results indicate that, although there is a significant increase in publication number since the 2008 financial crisis, the collaboration among authors is weak, especially at the international dimension. Also, the findings provide a comprehensive view of interdisciplinary research on bankruptcy modelling in finance, business management and computer science fields.

The authors sought to contribute to the theoretical development of bankruptcy prediction modeling by bringing new knowledge and key insights. Artificial intelligent techniques are now serving as important alternatives to statistical methods and demonstrate very promising results. This paper has both theoretical and practical implications. First, it provides insights for scholars into the theoretical evolution and intellectual structure for conducting future research in this field. Second, it sheds light on identifying under-explored machine learning techniques applied in bankruptcy prediction which can be crucial in management and decision-making for corporate firm managers and policy makers.

A Comparison on Leading Methodologies for Bankruptcy Prediction: The Case of the Construction Sector in Lithuania

Different economic environments differ in their characteristics; this prevents the usage of the same bankruptcy prediction models under different conditions. Objectively, the abundance of bankruptcy prediction models gives rise to the idea that these models are not in compliance with the changing business conditions in the market and do not meet the increasing complexity of business tasks. The purpose of this study is to assess the suitability of existing bankruptcy prediction models and the possibilities to increase the effectiveness of their application. In order to analyze theoretical aspects of the application of bankruptcy forecasting models and frame the research methodology, a systemic comparative and logical analysis of the scientific literature and statistical data, graphic data representation, induction, deduction and abstraction are employed. Results of the analysis confirm research hypotheses that bankruptcy prediction models based on macroeconomic variables are effective in identifying the number of corporate bankruptcies in a country and that the application of the model created on the grounds of macroeconomic indicators together with the traditional bankruptcy prediction model can improve the reliability of bankruptcy prediction. However, it was identified that models which are not specially adapted to companies in the construction sector are also suitable for forecasting their bankruptcies.