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Chen M.-Y.,National Taichung Institute of Technology
Expert Systems with Applications | Year: 2011

Lately, stock and derivative securities markets continuously and rapidly evolve in the world. As quick market developments, enterprise operating status will be disclosed periodically on financial statement. Unfortunately, if executives of firms intentionally dress financial statements up, it will not be observed any financial distress possibility in the short or long run. Recently, there were occurred many financial crises in the international marketing, such as Enron, Kmart, Global Crossing, WorldCom and Lehman Brothers events. How these financial events affect world's business, especially for the financial service industry or investors has been public's concern. To improve the accuracy of the financial distress prediction model, this paper referred to the operating rules of the Taiwan Stock Exchange Corporation (TSEC) and collected 100 listed companies as the initial samples. Moreover, the empirical experiment with a total of 37 ratios which composed of financial and other non-financial ratios and used principle component analysis (PCA) to extract suitable variables. The decision tree (DT) classification methods (C5.0, CART, and CHAID) and logistic regression (LR) techniques were used to implement the financial distress prediction model. Finally, the experiments acquired a satisfying result, which testifies for the possibility and validity of our proposed methods for the financial distress prediction of listed companies. This paper makes four critical contributions: (1) the more PCA we used, the less accuracy we obtained by the DT classification approach. However, the LR approach has no significant impact with PCA; (2) the closer we get to the actual occurrence of financial distress, the higher the accuracy we obtain in DT classification approach, with an 97.01% correct percentage for 2 seasons prior to the occurrence of financial distress; (3) our empirical results show that PCA increases the error of classifying companies that are in a financial crisis as normal companies; and (4) the DT classification approach obtains better prediction accuracy than the LR approach in short run (less one year). On the contrary, the LR approach gets better prediction accuracy in long run (above one and half year). Therefore, this paper proposes that the artificial intelligent (AI) approach could be a more suitable methodology than traditional statistics for predicting the potential financial distress of a company in short run. © 2011 Elsevier Ltd. All rights reserved.

Wang S.-L.,National Taichung Institute of Technology
Expert Systems with Applications | Year: 2011

Advances in wireless networking, mobile broadband Internet access technology as well as the rapid development of ubiquitous computing means e-learning is no longer limited to certain settings. A ubiquitous learning (u-learning) system must however not only provide the learner with learning resources at any time and any place. However, it must also actively provide the learner with the appropriate learning assistance for their context to help him or her complete their e-learning activity. In the traditional e-learning environment, the lack of immediate learning assistance, the limitations of the screen interface or inconvenient operation means the learner is unable to receive learning resources in a timely manner and incorporate them based on the actual context into the learner's learning activities. The result is impaired learning efficiency. Though developments in technology have overcome the constraints on learning space, an inability to appropriately exploit the technology may make it an obstacle to learning instead. When integrating the relevant information technology to develop a u-learning environment, it is therefore necessary to consider the personalization requirements of the learner to ensure that the technology achieves its intended result. This study therefore sought to apply context aware technology and recommendation algorithms to develop a u-learning system to help lifelong learning learners realize personalized learning goals in a context aware manner and improve the learner's learning effectiveness. © 2011 Elsevier Ltd. All rights reserved.

Hong W.,Yu Da University | Chen T.-S.,National Taichung Institute of Technology
IEEE Transactions on Information Forensics and Security | Year: 2012

This paper proposes a new data-hiding method based on pixel pair matching (PPM). The basic idea of PPM is to use the values of pixel pair as a reference coordinate, and search a coordinate in the neighborhood set of this pixel pair according to a given message digit. The pixel pair is then replaced by the searched coordinate to conceal the digit. Exploiting modification direction (EMD) and diamond encoding (DE) are two data-hiding methods proposed recently based on PPM. The maximum capacity of EMD is 1.161 bpp and DE extends the payload of EMD by embedding digits in a larger notational system. The proposed method offers lower distortion than DE by providing more compact neighborhood sets and allowing embedded digits in any notational system. Compared with the optimal pixel adjustment process (OPAP) method, the proposed method always has lower distortion for various payloads. Experimental results reveal that the proposed method not only provides better performance than those of OPAP and DE, but also is secure under the detection of some well-known steganalysis techniques. © 2011 IEEE.

Chen M.-Y.,National Taichung Institute of Technology
Information Sciences | Year: 2013

In recent years, newly-developed data mining and machine learning techniques have been applied to various fields to build intelligent information systems. However, few of these approaches offer online support or are able to flexibly adapt to large and complex financial datasets. Therefore, the present research adopts particle swarm optimization (PSO) techniques to obtain appropriate parameter settings for subtractive clustering (SC) and integrates the adaptive-network-based fuzzy inference system (ANFIS) model to construct a model for predicting business failures. Experiments were conducted based on an initial sample of 160 electronics companies listed on the Taiwan Stock Exchange Corporation (TSEC). Experimental results show that the proposed model is superior to other models, providing a lower mean absolute percentage error (MAPE) and root mean squared error (RMSE). The proposed one-order momentum method is able to learn quickly through one-pass training and provides high-accuracy short-term predictions, while the proposed two-order momentum provides high-accuracy long-term predictions from large financial datasets. Therefore, the proposed approach fulfills some important characteristics of the proposed model: the one-order momentum method is suitable for online learning and the two-order momentum method is suitable for incremental learning. Thus, the PS-ANFIS approach could provide better results in predicting potential financial distress. © 2012 Elsevier Inc. All rights reserved.

Chen M.-Y.,National Taichung Institute of Technology
Computers and Mathematics with Applications | Year: 2011

In this paper, we compare some traditional statistical methods for predicting financial distress to some more "unconventional" methods, such as decision tree classification, neural networks, and evolutionary computation techniques, using data collected from 200 Taiwan Stock Exchange Corporation (TSEC) listed companies. Empirical experiments were conducted using a total of 42 ratios including 33 financial, 8 non-financial and 1 combined macroeconomic index, using principle component analysis (PCA) to extract suitable variables. This paper makes four critical contributions: (1) with nearly 80% fewer financial ratios by the PCA method, the prediction performance is still able to provide highly-accurate forecasts of financial bankruptcy; (2) we show that traditional statistical methods are better able to handle large datasets without sacrificing prediction performance, while intelligent techniques achieve better performance with smaller datasets and would be adversely affected by huge datasets; (3) empirical results show that C5.0 and CART provide the best prediction performance for imminent bankruptcies; and (4) Support Vector Machines (SVMs) with evolutionary computation provide a good balance of high-accuracy short- and long-term performance predictions for healthy and distressed firms. Therefore, the experimental results show that the Particle Swarm Optimization (PSO) integrated with SVM (PSOSVM) approach could be considered for predicting potential financial distress. © 2011 Elsevier Ltd. All rights reserved.

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