Discovering causes of financial distress by combining evolutionary algorithms and artificial neural networks

  • Authors:
  • Antonio M. Mora García;Pedro A. Castillo Valdivieso;Juan J. Merelo Guervós;Eva Alfaro Cid;Anna I. Esparcia-Alcázar;Ken Sharman

  • Affiliations:
  • Universidad de Granada, Granada, Spain;Universidad de Granada, Granada, Spain;Universidad de Granada, Granada, Spain;Universidad Politécnica de Valencia, Valencia, Spain;Universidad Politécnica de Valencia, Valencia, Spain;Universidad Politécnica de Valencia, Valencia, Spain

  • Venue:
  • Proceedings of the 10th annual conference on Genetic and evolutionary computation
  • Year:
  • 2008

Quantified Score

Hi-index 0.00

Visualization

Abstract

In this work we compare two soft-computing methods for producing models that are able to predict whether a company is going to have book losses: artificial neural networks (ANNs) and genetic programming (GP). In order to build prediction models that can be applied to an extensive number of practical cases, we need simple models which require a small amount of data. Kohonen's self-organizing map (SOM) is a non-supervised neural network that is usually used as a clustering tool. In our case a SOM has been used to reduce the dimensions of the prediction problem. Traditionally, ANNs have been considered able to produce better classifier structures than GP. In this work we merge the capability of GP for generating classification trees and the feature extraction abilities of SOM, obtaining a classification tool that beats the results yielded using an evolutionary ANN method.