scholarly journals A Robust Deep Learning Model for Financial Distress Prediction

2020 ◽  
Vol 11 (2) ◽  
Author(s):  
Magdi El-Bannany ◽  
Meenu Sreedharan ◽  
Ahmed M.
Keyword(s):  
Deep Learning ◽  
Financial Distress ◽  
Learning Model ◽  
Financial Distress Prediction ◽  
Distress Prediction ◽  
Deep Learning Model

scholarly journals Financial Information Asymmetry: Using Deep Learning Algorithms to Predict Financial Distress

Symmetry ◽  
2021 ◽  
Vol 13 (3) ◽  
pp. 443
Author(s):  
Chyan-long Jan
Keyword(s):  
Neural Networks ◽  
Deep Learning ◽  
Information Asymmetry ◽  
Error Rate ◽  
Financial Distress ◽  
Prediction Models ◽  
High Accuracy ◽  
Financial Information ◽  
Financial Distress Prediction ◽  
Distress Prediction

Because of the financial information asymmetry, the stakeholders usually do not know a company’s real financial condition until financial distress occurs. Financial distress not only influences a company’s operational sustainability and damages the rights and interests of its stakeholders, it may also harm the national economy and society; hence, it is very important to build high-accuracy financial distress prediction models. The purpose of this study is to build high-accuracy and effective financial distress prediction models by two representative deep learning algorithms: Deep neural networks (DNN) and convolutional neural networks (CNN). In addition, important variables are selected by the chi-squared automatic interaction detector (CHAID). In this study, the data of Taiwan’s listed and OTC sample companies are taken from the Taiwan Economic Journal (TEJ) database during the period from 2000 to 2019, including 86 companies in financial distress and 258 not in financial distress, for a total of 344 companies. According to the empirical results, with the important variables selected by CHAID and modeling by CNN, the CHAID-CNN model has the highest financial distress prediction accuracy rate of 94.23%, and the lowest type I error rate and type II error rate, which are 0.96% and 4.81%, respectively.

Corporation financial distress prediction with deep learning: analysis of public listed companies in Malaysia

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Zulkifli Halim ◽  
Shuhaida Mohamed Shuhidan ◽  
Zuraidah Mohd Sanusi
Keyword(s):  
Time Series ◽  
Deep Learning ◽  
Financial Distress ◽  
Time Series Data ◽  
Series Data ◽  
Learning Models ◽  
Content Type ◽  
Financial Distress Prediction ◽  
Distress Prediction ◽  
Gated Recurrent Unit

PurposeIn the previous study of financial distress prediction, deep learning techniques performed better than traditional techniques over time-series data. This study investigates the performance of deep learning models: recurrent neural network, long short-term memory and gated recurrent unit for the financial distress prediction among the Malaysian public listed corporation over the time-series data. This study also compares the performance of logistic regression, support vector machine, neural network, decision tree and the deep learning models on single-year data.Design/methodology/approachThe data used are the financial data of public listed companies that been classified as PN17 status (distress) and non-PN17 (not distress) in Malaysia. This study was conducted using machine learning library of Python programming language.FindingsThe findings indicate that all deep learning models used for this study achieved 90% accuracy and above with long short-term memory (LSTM) and gated recurrent unit (GRU) getting 93% accuracy. In addition, deep learning models consistently have good performance compared to the other models over single-year data. The results show LSTM and GRU getting 90% and recurrent neural network (RNN) 88% accuracy. The results also show that LSTM and GRU get better precision and recall compared to RNN. The findings of this study show that the deep learning approach will lead to better performance in financial distress prediction studies. To be added, time-series data should be highlighted in any financial distress prediction studies since it has a big impact on credit risk assessment.Research limitations/implicationsThe first limitation of this study is the hyperparameter tuning only applied for deep learning models. Secondly, the time-series data are only used for deep learning models since the other models optimally fit on single-year data.Practical implicationsThis study proposes recommendations that deep learning is a new approach that will lead to better performance in financial distress prediction studies. Besides that, time-series data should be highlighted in any financial distress prediction studies since the data have a big impact on the assessment of credit risk.Originality/valueTo the best of authors' knowledge, this article is the first study that uses the gated recurrent unit in financial distress prediction studies based on time-series data for Malaysian public listed companies. The findings of this study can help financial institutions/investors to find a better and accurate approach for credit risk assessment.

Improving Sentiment Analysis using Hybrid Deep Learning Model

2020 ◽  
Vol 13 (4) ◽  
pp. 627-640 ◽  
Author(s):  
Avinash Chandra Pandey ◽  
Dharmveer Singh Rajpoot
Keyword(s):  
Neural Network ◽  
Deep Learning ◽  
Sentiment Analysis ◽  
Classification Accuracy ◽  
Short Term Memory ◽  
Computational Cost ◽  
Extraction Process ◽  
Learning Model ◽  
Sentiment Classification ◽  
Deep Learning Model

Background: Sentiment analysis is a contextual mining of text which determines viewpoint of users with respect to some sentimental topics commonly present at social networking websites. Twitter is one of the social sites where people express their opinion about any topic in the form of tweets. These tweets can be examined using various sentiment classification methods to find the opinion of users. Traditional sentiment analysis methods use manually extracted features for opinion classification. The manual feature extraction process is a complicated task since it requires predefined sentiment lexicons. On the other hand, deep learning methods automatically extract relevant features from data hence; they provide better performance and richer representation competency than the traditional methods. Objective: The main aim of this paper is to enhance the sentiment classification accuracy and to reduce the computational cost. Method: To achieve the objective, a hybrid deep learning model, based on convolution neural network and bi-directional long-short term memory neural network has been introduced. Results: The proposed sentiment classification method achieves the highest accuracy for the most of the datasets. Further, from the statistical analysis efficacy of the proposed method has been validated. Conclusion: Sentiment classification accuracy can be improved by creating veracious hybrid models. Moreover, performance can also be enhanced by tuning the hyper parameters of deep leaning models.

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