Author(s)

Yizhu Huan ¹

Affiliation(s)

¹ School of Business, Xi'an International Studies University, Shaanxi, Xi'an, 710100, China

Corresponding Author

Yizhu Huan

ABSTRACT

In the current fluctuating macro-environment, financial risk early warning is essential for all walks of life, especially for the trade and retail industry, which has been seriously impacted. Based on the five dimensions of profitability, solvency, operational capacity, development capacity, and corporate governance, this paper first establishes a stochastic forest model. Considering the poor interpretability of the model, this paper constructs an optimized Fisher discriminant financial early warning model based on the six indexes selected by the random forest model. The empirical results show that the accuracy of the model can reach 90.5%, which is significantly better than the original statistical model and can effectively help enterprises to prevent financial risks.

KEYWORDS

random forest model, Fisher discriminant, financial early warning model, financial status

CITE THIS PAPER

Yizhu Huan, Research on Early Financial Warning of Retail Trade based on Fisher Discriminant Analysis. Financial Engineering and Risk Management (2022) Vol. 5: 115-121. DOI: http://dx.doi.org/10.23977/ferm.2022.050314.

REFERENCES

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[4] Gu Xiaoan, Wang Bingqi, Li Wenqing. Research on the improvement of the accuracy of logistic financial early warning model. Journal of Nanjing Audit University, 2018,15 (04): 45-52
[5] Zhang Lijun, Wang Ying, Liu Juhong. Research on financial crisis early warning model of listed companies based on Bayesian discriminant analysis [J]. Business research, 2009, (04): 112-114

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