A multicriteria sorting procedure for financial classification problems: The case of business failure risk assessment

Araz C., Ozkarahan I.

6th International Conference on Intelligent Data Engineering and Automated Learning - IDEAL 2005, Brisbane, Australia, 6 - 08 July 2005, vol.3578, pp.563-570 identifier

  • Publication Type: Conference Paper / Full Text
  • Volume: 3578
  • Doi Number: 10.1007/11508069_73
  • City: Brisbane
  • Country: Australia
  • Page Numbers: pp.563-570
  • Dokuz Eylül University Affiliated: Yes

Abstract

This paper presents a new multicriteria sorting procedure in financial classification problems, based on the methodological framework of PROMETHEE method. The proposed procedure, called as PROMSORT, is applied to the business failure risk problem and compared to PROMETHEE TRI and ELECTRE TRI. The proposed methodology also identifies the differences in performances across risk groups, and assists in monitoring the firms' financial performances. The results showed that the proposed procedure can be considered as an effective alternative to existing methods in financial classification problems. © Springer-Verlag Berlin Heidelberg 2005.