Using self-organizing maps for analyzing credit rating and financial ratio data

Research output: Chapter in Book/Report/Conference proceedingConference contribution

5 Citations (Scopus)

Abstract

Credit rating granting in rating agencies is a complex decision making process for outside rating information users. The data these rating agencies required for making rating decision cover many facets, including financial data, operations data, the data regarding interview with top managers of issuers, etc. The systematic rating process, such as how each data item contributes to each specific rating granting, is still blind to the outsiders. Therefore, this study proposes an easy analytical tool for visualizing the relationships between credit rating information and financial ratio data. Self-organizing maps (SOMs) have been effectively used for visualizing and clustering tasks in numerous applications, such as financial statement analysis and document analysis, and thus this study applies SOMs on analyzing the relationship patterns. Banking industry data are used as the test bed. The study results demonstrate that the SOM could be a feasible tool for uncovering the relationships between those rating symbols and the data referred by rating agencies.

Original languageEnglish
Title of host publicationAPBITM 2011 - Proceedings2011 IEEE International Summer Conference of Asia Pacific Business Innovation and Technology Management
Pages109-112
Number of pages4
DOIs
Publication statusPublished - 2011
Event2011 IEEE International Summer Conference of Asia Pacific Business Innovation and Technology Management, APBITM 2011 - Dalian, China
Duration: 2011 Jul 102011 Jul 12

Publication series

NameAPBITM 2011 - Proceedings2011 IEEE International Summer Conference of Asia Pacific Business Innovation and Technology Management

Conference

Conference2011 IEEE International Summer Conference of Asia Pacific Business Innovation and Technology Management, APBITM 2011
CountryChina
CityDalian
Period2011/07/102011/07/12

Keywords

  • credit ratings
  • data mining
  • financial ratio
  • self-organizing maps

ASJC Scopus subject areas

  • Management of Technology and Innovation

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