A multicriteria sorting procedure for financial classification problems: the case of business failure risk assessment

Authors:
Ceyhun Araz;Irem Ozkarahan
Affiliations:
Department of Industrial Engineering, Dokuz Eylul University, Bornova-Izmir, Turkey;Department of Industrial Engineering, Dokuz Eylul University, Bornova-Izmir, Turkey
Venue:
IDEAL'05 Proceedings of the 6th international conference on Intelligent Data Engineering and Automated Learning
Year:
2005

Citing 2
Cited 2

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Abstract

This paper presents a new multicriteria sorting procedure in financial classification problems, based on the methodological framework of PROMETHEE method. The proposed procedure, called as PROMSORT, is applied to the business failure risk problem and compared to PROMETHEE TRI and ELECTRE TRI. The proposed methodology also identifies the differences in performances across risk groups, and assists in monitoring the firms’ financial performances. The results showed that the proposed procedure can be considered as an effective alternative to existing methods in financial classification problems.