Influencing factors for predicting financial performance based on genetic algorithms

Abstract

In this paper, considering the financial performance of China's listed companies as the dependent variable, a computational intelligence method based on genetic algorithms and discriminant analysis is employed to screen variables that influence financial performance and forecast the change of financial performance. Specifically, a new model based on genetic algorithms is developed to screen factors that influence financial performance of Chinese listed companies. The empirical results show that variables selected by genetic algorithms can predict financial performance well. © 2009 John Wiley & Sons, Ltd.