Deciding the financial health of dot-coms using rough sets

  • Authors:
  • Indranil Bose

  • Affiliations:
  • School of Business, The University of Hong Kong, Hong Kong, PR China

  • Venue:
  • Information and Management
  • Year:
  • 2006

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Abstract

We conducted an empirical investigation of dot-coms from a financial perspective. Data from the financial statements of 240 such businesses was used to compute financial ratios and the rough sets technique was used to evaluate whether the financial ratios could predict financial health of them based on available data. The most predictive financial ratios were identified and interesting rules concerning the financial ratios and financial health of dot-coms were discovered. It was shown that rough sets performed a satisfactory job of predicting financial health and were more suitable for detecting unhealthy dot-coms than healthy ones.