The effect of inconsistent differences in financial ratio trends on model reliability

Author

Yang, Z.R. ; James, H. ; Packer, A.

Author_Institution

Dept. of Land & Constr. Manage., Univ. of Portsmouth, UK

fYear

1997

fDate

23-25 Mar 1997

Firstpage

273

Lastpage

279

Abstract

Inconsistent differences between the ratio trends of failed and successful companies have studied recently, but the effect of inconsistent differences on model reliability has not been studied so far. In fact, since the construction of a company failure prediction model requires the collection of company financial data over several years, inconsistent differences between the ratio trends of failed and successful companies makes a multi-dimensional data space formed by nonlinearly separable financial ratios. A thorough study of this causal relationship should help the correct selection of a method for model construction

Keywords

corporate modelling; reliability theory; causal relationship; company failure prediction model; failed companies; financial data collection; financial ratio trends; inconsistent differences; model construction method; model reliability; multi-dimensional data space; nonlinearly separable financial ratios; successful companies; Accuracy; Constitution; Construction industry; Costs; Economic forecasting; Failure analysis; Neural networks; Personnel; Predictive models; Profitability;

fLanguage

English

Publisher

ieee

Conference_Titel

Computational Intelligence for Financial Engineering (CIFEr), 1997., Proceedings of the IEEE/IAFE 1997

Conference_Location

New York City, NY

Print_ISBN

0-7803-4133-3

Type

conf

DOI

10.1109/CIFER.1997.618948

Filename

618948