Evaluating financial Distress: A Comparison of Four Inductive Decision Models

摘要

The purpose of this study is to examine the ability of four inductive decision model - discriminant analysis, logistic regression, neural networks, and pocket algorithm with ratchet - to evaluate the financial distress of stressed firms using the common methods of Altman, Deakin, and Ohlson. Overall, results did not indicate on combination of method and model tat outperformed all others. However, resutls did indicate that, overall, neural networks and the pocket algorithm tended to outperform discriminant analysis and logistic regression. Additionally, Ohlson and Deakin seemed to be better than Altman for evaluating financial distress.