The effect of profit management and patterns of business strategies on the bankruptcy of Iranian listed companies using neural networks

Rajab Ali Kevani Hafshjani¹

1) Author

IOI Code : XKZC-AZZKAC
Publication : International Conference on International Trading, Economic Studies & Human Sciences (hestconf.com)
Abstract :
    In the recent decades, with the increase in the competitive situation in the financial markets of Iran, some companies suffered bankruptcy and finally had to leave the competition, so financial bankruptcy has become an interesting and important issue for the company s stakeholders, so that they can Take the necessary decisions. This worries the capital owners and society in general. Also, bankruptcy can cause huge losses for shareholders, investors, creditors, managers, employees, suppliers of raw materials and subsequent customers. Bankruptcy occurs when the company has permanent and serious losses, or does not have the ability to repay debts that exceed its assets. Therefore, considering the increase in corporate bankruptcy, identifying the factors affecting it has become one of the most important issues today. Important and influential factors on bankruptcy are profit management and patterns of business strategies in companies admitted to the Tehran Stock Exchange. In this research, to analyze the research data, in order to test the research hypotheses from the multivariate regression model and the significant difference in the estimated error of the model, regression and neural network methods are used to investigate the impact of profit management and business strategy patterns on The bankruptcy risk of the companies admitted to the Tehran Stock Exchange has been discussed during the years 2013 to 2016. Statistical tests on 84 companies that were selected as research samples. The results obtained from the hypothesis test indicate that the research findings indicate that profit management, strategy management and industry management have a positive effect on the company s bankruptcy risk, but the effect of business management on bankruptcy risk was not confirmed. The test of two performance evaluation criteria showed that the prediction accuracy of the neural network in the effect of independent variables on the risk of bankruptcy is higher than the multivariate regression model.

Keywords : profit management strategy management business management industrial management bankruptcy risk