Prediction of Financial Failure With Artificial Neural Network Technology and an Empirical Application on Publicly Held Companies

Multivariate statistical techniques are used widely and successfully in financial failure prediction models. On the other hand, the existing applications of multivariate statistical techniques on financial failure pay insufficient attention to assumptions of these techniques. Therefore, some methodological problems arise about generalization of the models that are developed with in multivariate statistical techniques. Artificial Neural Network is an alternative technology to predict financial failure. This study indicated that neural networks provided better results then multivariate discriminant analysis in prediction of financial failure.