Data mining in predicting firms failure: a comparative study using artificial neural networks and classification and regression tree / Norashikin Nasaruddin ...[et al.]
Financial Institutions and investors alike are very much interested in the accuracy of predicting the potential failures of firms. These financial institutions believe accurate prediction will lead to a low default rate in servicing their financial loans. The aim of this study is to find a better mo...
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my.uitm.ir.539912023-02-22T07:29:20Z https://ir.uitm.edu.my/id/eprint/53991/ Data mining in predicting firms failure: a comparative study using artificial neural networks and classification and regression tree / Norashikin Nasaruddin ...[et al.] Nasaruddin, Norashikin Che-Hussain, Wan-Siti-Esah Nayan, Asmahani Ahmad, Abd-Razak Banking Financial management. Business finance. Corporation finance Financial Institutions and investors alike are very much interested in the accuracy of predicting the potential failures of firms. These financial institutions believe accurate prediction will lead to a low default rate in servicing their financial loans. The aim of this study is to find a better model to classify firms that is more likely to fail. Bad prediction model will lead to a high default rate. Using financial and non-financial information, this paper illustrates the construction and comparison of two models – artificial neural networks (NN) and classification and regression tree (CART) models to classify the failed from the non-failed firms. This study found that based on the training sample’s result (NN = 94.03% & CART = 94.69%) the overall accuracy result of CART is higher than the NN model. Similar result can be drawn for the validation sample with CART leading at 92.93% overall accuracy rate compared to NN’s 91.92%. 2015-11-04 Conference or Workshop Item PeerReviewed text en https://ir.uitm.edu.my/id/eprint/53991/1/53991.pdf Data mining in predicting firms failure: a comparative study using artificial neural networks and classification and regression tree / Norashikin Nasaruddin ...[et al.]. (2015) In: International Conference on Computing, Mathematics and Statistics (iCMS2015), 4-5 November 2015, Langkawi Lagoon Resort Langkawi Island, Kedah Malaysia. (Submitted) |
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Banking Financial management. Business finance. Corporation finance Nasaruddin, Norashikin Che-Hussain, Wan-Siti-Esah Nayan, Asmahani Ahmad, Abd-Razak Data mining in predicting firms failure: a comparative study using artificial neural networks and classification and regression tree / Norashikin Nasaruddin ...[et al.] |
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Financial Institutions and investors alike are very much interested in the accuracy of predicting the potential failures of firms. These financial institutions believe accurate prediction will lead to a low default rate in servicing their financial loans. The aim of this study is to find a better model to classify firms that is more likely to fail. Bad prediction model will lead to a high default rate. Using financial and non-financial information, this paper illustrates the construction and comparison of two models – artificial neural networks (NN) and classification and regression tree (CART) models to classify the failed from the non-failed firms. This study found that based on the training sample’s result (NN = 94.03% & CART = 94.69%) the overall accuracy result of CART is higher than the NN model. Similar result can be drawn for the validation sample with CART leading at 92.93% overall accuracy rate compared to NN’s 91.92%. |
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Conference or Workshop Item |
author |
Nasaruddin, Norashikin Che-Hussain, Wan-Siti-Esah Nayan, Asmahani Ahmad, Abd-Razak |
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Nasaruddin, Norashikin Che-Hussain, Wan-Siti-Esah Nayan, Asmahani Ahmad, Abd-Razak |
author_sort |
Nasaruddin, Norashikin |
title |
Data mining in predicting firms failure: a comparative study using artificial neural networks and classification and regression tree / Norashikin Nasaruddin ...[et al.] |
title_short |
Data mining in predicting firms failure: a comparative study using artificial neural networks and classification and regression tree / Norashikin Nasaruddin ...[et al.] |
title_full |
Data mining in predicting firms failure: a comparative study using artificial neural networks and classification and regression tree / Norashikin Nasaruddin ...[et al.] |
title_fullStr |
Data mining in predicting firms failure: a comparative study using artificial neural networks and classification and regression tree / Norashikin Nasaruddin ...[et al.] |
title_full_unstemmed |
Data mining in predicting firms failure: a comparative study using artificial neural networks and classification and regression tree / Norashikin Nasaruddin ...[et al.] |
title_sort |
data mining in predicting firms failure: a comparative study using artificial neural networks and classification and regression tree / norashikin nasaruddin ...[et al.] |
publishDate |
2015 |
url |
https://ir.uitm.edu.my/id/eprint/53991/1/53991.pdf https://ir.uitm.edu.my/id/eprint/53991/ |
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1758581645686865920 |
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13.211869 |