Contemporary Trends in Accounting, Finance and Financial Institutions by Taufiq Choudhry & Jacek Mizerka

Author:Taufiq Choudhry & Jacek Mizerka
Language: eng
Format: epub
Publisher: Springer International Publishing, Cham

3 Methods

The study can be classified in applied studies group and the research strategy is descriptive. Neural network technique (NN)—also called artificial neural network (ANN)—is used. The collected data was obtained from a bank operating on Polish market, the Commercial Court in Poznań (Poland)3 and from NOTORIA SERWIS. The data cover a period of six years (2009–2014). The sample contains financial statements of companies which include a balance sheet, an income statement, a cash flow statement and a statement of changes in equity. The obtained sample contained of 2901 objects, however, 323 units were incomplete regarding the financial statements, therefore, they were removed from further analysis.

The purpose of the research is to determine those endogenous factors which affect the level of company’s credit risk. It is important to identify which of the factors have the biggest impact and which are redundant and therefore can be removed from future analysis. The research also focuses on investigating and comparing the results of two different structures of neural networks—the most common Multi-Layer Perceptron (MLP) and Radial Basis Function neural network (RBF).

The implemented tool is STATISTICA Neural Networks (SANN). Variables are divided into dependent and independent ones. Independent variables are the financial ratios which banks find the most significant in credit risk analysis and use them in their models. The dependent variables are identified as a “good” or “bad” company. A “good” company was the one which was granted financial resources and, consequently, the “bad” enterprise was the one whose application was rejected.

The data set was divided into three groups in a following manner:1.learning group (80% of data set),

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.