Financial Forecasting with Multivariate Adaptive Regression Splines and Queen Genetic Algorithm-Support Vector Regression

Abstract

In consideration of the financial indicators of financial structure, solvency, operating ability, profitability, and cash flow as well as the non-financial indicators of firm size and corporate governance, the algorithms of multivariate adaptive regression splines (MARS) and queen genetic algorithm-support vector regression (QGA-SVR) are used in this study to create a comprehensive financial forecast of operating revenue, earnings per share, free cash flow, and net working capital to help enterprises forecast their future financial situation and offer investors and creditors a reference for investment decision-making. This study's objectives are achieved through the following steps: (i) establishment of feature indicators for financial forecasting, (ii) development of a financial forecasting method, and (iii) demonstration of the proposed method and comparison with existing methods.