3. Research model development
3.1 Rough set data preprocessing
3.2 The hybrid models
4.1 Research data
4.2 Neural network configuration
4.3 Experiment and results
4.5 Analysis of the results
This paper proposes a hybrid intelligent system that predicts the failure of firms based on the past financial performance data, combining neural network and rough set approach. We can get reduced information table, which implies that the number of evaluation criteria such as financial ratios and qualitative variables and objects (i.e., firms) is reduced with no information loss through rough set approach. And then, this reduced information is used to develop classification rules and train neural network to infer appropriate parameters. Through the reduction of information table, it is expected that the performance of the neural network improve.
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