International Business Management

Year: 2016
Volume: 10
Issue: 26
Page No. 5973 - 5982

Designing Bankruptcy Prediction System Using Artificial Neural Network Based on Evidence from Iranian Manufacturing Companies

Authors : Abbas Ramzanzadeh Zeidi, Seyd Mehdy Fadakar, Keyvan Akbarpoor and Maryam Salimi

Abstract: Financial distress and bankruptcy result in a lot of costs. The costs will extend to different groups such as creditors, investors, managers, legal institutions and eventually capital owners. Bankruptcy prediction is a way that significantly can avoid financial distress. The purpose of the study is to design a system using artificial neural network to predict bankruptcy of companies listed in Tehran Stock Exchange before occurring bankruptcy, this system should be designed in a way that can predict the financial situation of company within the next three years. The research method is ex-post facto or survey and the statistical population of research including companies listed in Tehran Stock Exchange during 2001-2010. The data of 54 companies (30 bankrupt companies and 24 companies with Tobin Q above one) was tested by two parameters: 0.15 and 03% accuracy (optimism and pessimism).

How to cite this article:

Abbas Ramzanzadeh Zeidi, Seyd Mehdy Fadakar, Keyvan Akbarpoor and Maryam Salimi, 2016. Designing Bankruptcy Prediction System Using Artificial Neural Network Based on Evidence from Iranian Manufacturing Companies. International Business Management, 10: 5973-5982.

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