Automatic Selection of Financial Ratios by Means of Differential Evolution and for Predicting Business Insolvency

• José Santos ^[1] ; Óscar Sestayo ^[1] ; Ángel Beade ^[1] ; Manuel Rodríguez ^[1]
  1. [1] Universidade da Coruña

     Universidade da Coruña

     A Coruña, España

     
• Localización: Bio-inspired Systems and Applications: from Robotics to Ambient Intelligence: 9th International Work-Conference on the Interplay Between Natural and Artificial Computation, IWINAC 2022, Puerto de la Cruz, Tenerife, Spain, May 31 – June 3, 2022, Proceedings, Part II / José Manuel Ferrández Vicente (dir. congr.) , José Ramón Álvarez Sánchez (dir. congr.) , Félix de la Paz López (dir. congr.) , Hojjat Adeli (aut.), 2022, ISBN 978-3-031-06527-9, págs. 534-544
• Idioma: inglés
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• Resumen

  • Differential evolution was used for the automatic selection of financial ratios for the prediction of business insolvency. A sample of companies from the Galician economy is used to predict the insolvency of a company a year in advance. The genetic population encodes possible sets or combinations of financial ratios, and the quality of each encoded solution is determined by the classification accuracy provided by a KNN classifier that uses the selected encoded ratios. Finally, the selected and relevant ratios are used with a more robust classifier, a classical multilayer perceptron, which provides greater sensitivity in the prediction results.