Financial Performance Prediction System in Industrial Companies through Data Mining Algorithms

Sohrabi, Babak; Raeesi Vanani, Iman; Bootorabi, Babak

doi:10.22054/ims.2016.5146

Document Type : Research Paper

Authors

¹ Professor, Faculty of Management, University of Tehran, Tehran, Iran

²  Assistant Professor, Faculty of Management and Accounting, Allameh Tabataba’i University, Tehran, Iran.

³ MSc of Information Technology Management, University of Tehran, Tehran, Iran

https://doi.org/10.22054/ims.2016.5146

Abstract

With the emergence of new businesses leading to the complicated and changing business environments, industrial managers and investors need tools and mechanisms to acquire a more clarified view of their business in different financial aspects in the future. The financial status of industrial firms has always had a significant analytical role and the evaluation of profitability has been conducted through the analysis of financial indicators that appear as key performance measures. In this regard, financial statements provides the stakeholders with accurate organizational status in a specific period of time. In the current research, the researchers have attempted to utilize the financial ratios as well as data mining algorithms so as to design a system that accurately predicts the net profit based on the previous performance of firms and accordingly, providing an appropriate performance analysis. The designed neural network model predicts the profit through the detection of relationships among financial ratios and previous profitability of the industrial firm.

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