An Innovative Approach to Financial Distress Prediction Using Relative Weighted Neutrosophic Valued Distances.

Abdullayev, Ilyos; Osadchy, Eduard; Shcherbakova, Natalya; Kosorukova, Irina

The financial constraints of companies listed jeopardize the interests of employees and internal managers but also carries significant threats to outer investor and other stakeholders. Thus, there is need to create an effective financial distress predictive system. The two most pressing issues in finance are assessing credit risk and predicting bankruptcies. Thus, credit scoring and financial distress prediction remain crucial areas of research in the financial industry. Previous research has aimed at the design of ML and statistical approaches to predict the financial distress of the company. Neutrosophic set may be utilized, which is a generality of classical, fuzzy, and intuitionistic fuzzy sets (IFS). They establish a foundation for addressing inconsistency, indeterminacy, and uncertainty associated with real-world challenges. This study presents an Innovative Approach to Financial Distress Prediction using Relative Weighted Neutrosophic Valued Distances (IAFDP-RWNVD) technique. The IAFDP-RWNVD technique intends to estimate the occurrence of financial distress in any firm or organization. In the IAFDP-RWNVD technique, two major processes are comprised. At the primary stage, the IAFDP-RWNVD technique applies RWNVD technique for the identification of financial distress. In the second stage, the IAFDP-RWNVD technique designs fish swarm algorithm (FSA) for finetuning the RWNVD model. The experimental outcomes of the IAFDP-RWNVD method is investigated using distinct aspects. The experimentation outcome shows the improvements of the IAFDP-RWNVD technique.

PREDICTION models; NEUTROSOPHIC logic; CREDIT risk; BANKRUPTCY; FUZZY systems

International Journal of Neutrosophic Science (IJNS), 2025, Vol 25, Issue 1, p370

2692-6148

Academic Journal

10.54216/IJNS.250133