• Journal of Intelligence and Information Systems
• /
• v.21 no.3
• /
• pp.79-99
• /
• 2015

The prediction of bankruptcy has been extensively studied in the accounting and finance field. It can have an important impact on lending decisions and the profitability of financial institutions in terms of risk management. Many researchers have focused on constructing a more robust bankruptcy prediction model. Early studies primarily used statistical techniques such as multiple discriminant analysis (MDA) and logit analysis for bankruptcy prediction. However, many studies have demonstrated that artificial intelligence (AI) approaches, such as artificial neural networks (ANN), decision trees, case-based reasoning (CBR), and support vector machine (SVM), have been outperforming statistical techniques since 1990s for business classification problems because statistical methods have some rigid assumptions in their application. In previous studies on corporate bankruptcy, many researchers have focused on developing a bankruptcy prediction model using financial ratios. However, there are few studies that suggest the specific types of bankruptcy. Previous bankruptcy prediction models have generally been interested in predicting whether or not firms will become bankrupt. Most of the studies on bankruptcy types have focused on reviewing the previous literature or performing a case study. Thus, this study develops a model using data mining techniques for predicting the specific types of bankruptcy as well as the occurrence of bankruptcy in Korean small- and medium-sized construction firms in terms of profitability, stability, and activity index. Thus, firms will be able to prevent it from occurring in advance. We propose a hybrid approach using two artificial neural networks (ANNs) for the prediction of bankruptcy types. The first is a back-propagation neural network (BPN) model using supervised learning for bankruptcy prediction and the second is a self-organizing map (SOM) model using unsupervised learning to classify bankruptcy data into several types. Based on the constructed model, we predict the bankruptcy of companies by applying the BPN model to a validation set that was not utilized in the development of the model. This allows for identifying the specific types of bankruptcy by using bankruptcy data predicted by the BPN model. We calculated the average of selected input variables through statistical test for each cluster to interpret characteristics of the derived clusters in the SOM model. Each cluster represents bankruptcy type classified through data of bankruptcy firms, and input variables indicate financial ratios in interpreting the meaning of each cluster. The experimental result shows that each of five bankruptcy types has different characteristics according to financial ratios. Type 1 (severe bankruptcy) has inferior financial statements except for EBITDA (earnings before interest, taxes, depreciation, and amortization) to sales based on the clustering results. Type 2 (lack of stability) has a low quick ratio, low stockholder's equity to total assets, and high total borrowings to total assets. Type 3 (lack of activity) has a slightly low total asset turnover and fixed asset turnover. Type 4 (lack of profitability) has low retained earnings to total assets and EBITDA to sales which represent the indices of profitability. Type 5 (recoverable bankruptcy) includes firms that have a relatively good financial condition as compared to other bankruptcy types even though they are bankrupt. Based on the findings, researchers and practitioners engaged in the credit evaluation field can obtain more useful information about the types of corporate bankruptcy. In this paper, we utilized the financial ratios of firms to classify bankruptcy types. It is important to select the input variables that correctly predict bankruptcy and meaningfully classify the type of bankruptcy. In a further study, we will include non-financial factors such as size, industry, and age of the firms. Thus, we can obtain realistic clustering results for bankruptcy types by combining qualitative factors and reflecting the domain knowledge of experts.

• Journal of the Korean Institute of Intelligent Systems
• /
• v.7 no.3
• /
• pp.43-54
• /
• 1997

Knowledge acquisition is one of the most difficult problems in designing fuzzy systems. As application domains of fuzzy systems become larger and more complex, it is more difficult to find the relations among the system's input- outpiit variables. Moreover, it takes a lot of efforts to formulate expert's knowledge about complex systems' control actions by linguistic variables. Another difficulty is to define and adjust membership functions properly. Soin conventional fuzzy systems, the membership functions should be adjusted to improve the system performance. This is time-consuming process. In this paper, we suggest a new approach to design a fuzzy system. We design a fuzzy system using two neural networks, Kohonen neural network and backpropagation neural network, which generate fuzzy rules automatically and construct inference network. Since fuzzy inference is performed based on fuzzy relation in this approach, we don't need the membership functions of each variable. Therefore it is unnecessary to define and adjust membership functions and we can get fuzzy rules automatically. The design process of fuzzy system becomes simple. The proposed approach is applied to a simulated automatic car speed control system. We can be sure that this approach not only makes the design process of fuzzy systems simple but also produces appropriate inference results.

• 한국지구물리탐사학회:학술대회논문집
• /
• 2008.10a
• /
• pp.51-56
• /
• 2008

The waveform inversion for isotropic media has ever been studied since the 1980s, but there has been few studies for anisotropic media. We present a seismic waveform inversion algorithm for 2-D heterogeneous transversely isotropic structures. A cell-based finite difference algorithm for anisotropic media in time domain is adopted. The steepest descent during the non-linear iterative inversion approach is obtained by backpropagating residual errors using a reverse time migration technique. For scaling the gradient of a misfit function, we use the pseudo Hessian matrix which is assumed to neglect the zero-lag auto-correlation terms of impulse responses in the approximate Hessian matrix of the Gauss-Newton method. We demonstrate the use of these waveform inversion algorithm by applying them to a two layer model and the anisotropic Marmousi model data. With numerical examples, we show that it's difficult to converge to the true model when we assumed that anisotropic media are isotropic. Therefore, it is expected that our waveform inversion algorithm for anisotropic media is adequate to interpret real seismic exploration data.

• Journal of the Korean Institute of Intelligent Systems
• /
• v.10 no.4
• /
• pp.343-350
• /
• 2000

In this paper, we propose the Multi-FPNN(Fuzzy Polynomial Neural Networks) model based on FNN and PNN(Polyomial Neural Networks) for optimal system identifacation. Here FNN structure is designed using fuzzy input space divided by each separated input variable, and urilized both in order to get better output performace. Each node of PNN structure based on GMDH(Group Method of Data handing) method uses two types of high-order polynomials such as linearane and quadratic, and the input of that node uses three kinds of multi-variable inputs such as linear and quadratic, and the input of that node and Genetic Algorithms(GAs) to identify both the structure and the prepocessing of parameters of a Multi-FPNN model. Here, HCM clustering method, which is carried out for data preproessing of process system, is utilized to determine the structure method, which is carried out for data preprocessing of process system, is utilized to determance index with a weighting factor is used to according to the divisions of input-output space. A aggregate performance inddex with a wegihting factor is used to achieve a sound balance between approximation and generalization abilities of the model. According to the selection and adjustment of a weighting factor of this aggregate abjective function which it is acailable and effective to design to design and optimal Multi-FPNN model. The study is illustrated with the aid of two representative numerical examples and the aggregate performance index related to the approximation and generalization abilities of the model is evaluated and discussed.

• KSCE Journal of Civil and Environmental Engineering Research
• /
• v.26 no.1B
• /
• pp.61-67
• /
• 2006

Various methods have been applied for the research to model the relationship between rainfall-runoff, which shows a strong nonlinearity. In particular, most researches to model the relationship between rainfall-runoff using artificial neural networks have used back propagation algorithm (BPA), Levenberg Marquardt (LV) and radial basis function (RBF). and They have been proved to be superior in representing the relationship between input and output showing strong nonlinearity and to be highly adaptable to rapid or significant changes in data. The theory of artificial neural networks is utilized not only for prediction but also for classifying the patterns of data and analyzing the characteristics of the patterns. Thus, the present study applied self?organizing map (SOM) based on Kohonen's network theory in order to classify the patterns of rainfall-runoff process and analyze the patterns. The results from the method proposed in the present study revealed that the method could classify the patterns of rainfall in consideration of irregular changes of temporal and spatial distribution of rainfall. In addition, according to the results from the analysis the patterns between rainfall-runoff, seven patterns of rainfall-runoff relationship with strong nonlinearity were identified by SOM.

• KSCE Journal of Civil and Environmental Engineering Research
• /
• v.29 no.2B
• /
• pp.111-120
• /
• 2009

A local scour around a bridge pier is known as one of important factors of bridge collapse. Two approaches are usually used in estimating a scour depth in practice. One is to use empirical formulas, and the other is to use computational methods. But the use of empirical formulas is limited to predict a scour depth under similar conditions to which the formulas were derived. Computational methods are currently too expensive to be applied to practical engineering problems. This study presented the application of artificial neural networks (ANN) to the prediction of a scour depth around a bridge pier at an equilibrium state. This study also investigated various ANN algorithms for estimating a scour depth, such as Backpropagation Network, Radial Basis Function Network, and Generalized Regression Network. Preliminary study showed that ANN models resulted in very wide range of errors in predicting a scour depth. To solve this problem this study incorporated cluster analysis into ANN. The incorporation of cluster analysis provided better estimations of scour depth up to 42% compared with other approaches.

• Journal of Cadastre & Land InformatiX
• /
• v.48 no.1
• /
• pp.169-186
• /
• 2018

The social influence of the elderly population will accelerate in a rapidly aging society. The purpose of this study is to establish a methodology for extracting vulnerable districts of the welfare of the aged through machine learning(ML), artificial neural network(ANN) and geospatial analysis. In order to establish the direction of analysis, this progressed after an interview with volunteers who over 65-year old people, public officer and the manager of the aged welfare facility. The indicators are the geographic distance capacity, elderly welfare enjoyment, officially assessed land price and mobile communication based on old people activities where 500 m vector areal unit within 15 minutes in Yongin-city, Gyeonggi-do. As a result, the prediction accuracy of 83.2% in the support vector machine(SVM) of ML using the RBF kernel algorithm was obtained in simulation. Furthermore, the correlation result(0.63) was derived from ANN using backpropagation algorithm. A geographically weighted regression(GWR) was also performed to analyze spatial autocorrelation within variables. As a result of this analysis, the coefficient of determination was 70.1%, which showed good explanatory power. Moran's I and Getis-Ord Gi coefficients are analyzed to investigate spatially outlier as well as distribution patterns. This study can be used to solve the welfare imbalance of the aged considering the local conditions of the government recently.

• Journal of the Korean Institute of Intelligent Systems
• /
• v.10 no.5
• /
• pp.487-496
• /
• 2000

In this paper, the Multi-FNN(Fuzzy-Neural Networks) model is identified and optimized using HCM(Hard C-Means) clustering method and genetic algorithms. The proposed Multi-FNN is based on Yamakawa's FNN and uses simplified inference as fuzzy inference method and error back propagation algorithm as learning rules. We use a HCM clustering and Genetic Algorithms(GAs) to identify both the structure and the parameters of a Multi-FNN model. Here, HCM clustering method, which is carried out for the process data preprocessing of system modeling, is utilized to determine the structure of Multi-FNN according to the divisions of input-output space using I/O process data. Also, the parameters of Multi-FNN model such as apexes of membership function, learning rates and momentum coefficients are adjusted using genetic algorithms. A aggregate performance index with a weighting factor is used to achieve a sound balance between approximation and generalization abilities of the model. The aggregate performance index stands for an aggregate objective function with a weighting factor to consider a mutual balance and dependency between approximation and predictive abilities. According to the selection and adjustment of a weighting factor of this aggregate abjective function which depends on the number of data and a certain degree of nonlinearity, we show that it is available and effective to design an optimal Multi-FNN model. To evaluate the performance of the proposed model, we use the time series data for gas furnace and the numerical data of nonlinear function.

• The KIPS Transactions:PartB
• /
• v.12B no.3 s.99
• /
• pp.349-356
• /
• 2005

Artificial Organism-used application areas are expanding at a break-neck speed with a view to getting things done in a dynamic and Informal environment. A use of general programming or traditional hi methods as the representation of Artificial Organism behavior knowledge in these areas can cause problems related to frequent modifications and bad response in an unpredictable situation. Strategies aimed at solving these problems in a machine-learning fashion includes Genetic Programming and Evolving Neural Networks. But the learning method of Artificial-Organism is not good yet, and can't represent life in the environment. With this in mind, this research is designed to come up with a new behavior evolution model. The model represents behavior knowledge with Classification Rules and Enhanced Backpropation Neural Networks and discriminate the denomination. To evaluate the model, the researcher applied it to problems with the competition of Artificial-Organism in the Simulator and compared with other system. The survey shows that the model prevails in terms of the speed and Qualify of learning. The model is characterized by the simultaneous learning of classification rules and neural networks represented on chromosomes with the help of Genetic Algorithm and the consolidation of learning ability caused by the hybrid processing of the classification rules and Enhanced Backpropagation Neural Network.

• Journal of Intelligence and Information Systems
• /
• v.10 no.1
• /
• pp.109-123
• /
• 2004

Corporate financial distress and bankruptcy prediction is one of the major application areas of artificial neural networks (ANNs) in finance and management. ANNs have showed high prediction performance in this area, but sometimes are confronted with inconsistent and unpredictable performance for noisy data. In addition, it may not be possible to train ANN or the training task cannot be effectively carried out without data reduction when the amount of data is so large because training the large data set needs much processing time and additional costs of collecting data. Instance selection is one of popular methods for dimensionality reduction and is directly related to data reduction. Although some researchers have addressed the need for instance selection in instance-based learning algorithms, there is little research on instance selection for ANN. This study proposes a genetic algorithm (GA) approach to instance selection in ANN for bankruptcy prediction. In this study, we use ANN supported by the GA to optimize the connection weights between layers and select relevant instances. It is expected that the globally evolved weights mitigate the well-known limitations of gradient descent algorithm of backpropagation algorithm. In addition, genetically selected instances will shorten the learning time and enhance prediction performance. This study will compare the proposed model with other major data mining techniques. Experimental results show that the GA approach is a promising method for instance selection in ANN.