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Insolvency Prediction of Irish Companies Using Backpropagation and Fuzzy ARTMAP Neural Networks

  • Anatoli Nachev
  • Seamus Hill
  • Borislav Stoyanov
Conference paper
Part of the Lecture Notes in Business Information Processing book series (LNBIP, volume 24)

Abstract

This study explores experimentally the potential of BPNNs and Fuzzy ARTMAP neural networks to predict insolvency of Irish firms. We used financial information for Irish companies for a period of six years, preprocessed properly in order to be used with neural networks. Prediction results show that with certain network parameters the Fuzzy ARTMAP model outperforms BPNN. It outperforms also self-organising feature maps as reported by other studies that use the same dataset. Accuracy of predictions was validated by ROC analysis, AUC metrics, and leave-one-out cross-validation.

Keywords

Insolvency prediction Data mining Neural networks Backpropagation Fuzzy ARTMAP 

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Copyright information

© Springer-Verlag Berlin Heidelberg 2009

Authors and Affiliations

  • Anatoli Nachev
    • 1
  • Seamus Hill
    • 1
  • Borislav Stoyanov
    • 2
  1. 1.Business Information Systems, Cairnes School of Business & EconomicsNUIGalwayIreland
  2. 2.Department of Computer Systems and TechnologiesShumen UniversityBulgaria

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