An application of pattern recognition on scoring Chinese corporations financial conditions based on backpropagation neural network

Authors:
Liang Liang;Desheng Wu
Affiliations:
School of Business, University of Science and Technology of China, Hefei Anhui 230026, PR China;School of Business, University of Science and Technology of China, Hefei Anhui 230026, PR China
Venue:
Computers and Operations Research
Year:
2005

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Abstract

The paper follows three parts on the whole. The first part reviews the literature on financial diagnosis and the appropriate measures to be currently used. Thus the research gaps in the fields are highlighted. Next part details the variables and samples selection, data, analysis and results applying to scoring financial conditions of a Chinese corporation. By using pattern recognition theory, a scoring model is developed to analyze corporate financial conditions by backpropagation neural networks. It has been proved to be better than ordinary BPNN and traditional multivariate discriminant analysis. Finally, conclusions are presented.