Modeling for Measuring Corporate Financial Sustainability Using the Econophysics and Bayesian Method

Subject Areas : Financial engineering

moloud soleimani ¹ , Faegh ahmadi ² , Mohammad Hossein Ranjbar ³ , Hamid Reza vakilifard ⁴

1 - Department of Accounting, Qeshm Branch, Islamic Azad University, Qeshm, Iran
2 - Department of Financial Management and Accounting, Qeshm Branch, Islamic Azad University, Qeshm, Iran
3 - Department of Accounting and Management, Bandar Abbas Branch, Islamic Azad University, Bandar Abbas, Iran
4 - Department of Accounting and Financial Management, Science and Research Branch, Islamic Azad University, Tehran, Iran

Received: 2020-04-14 Accepted : 2020-08-09 Published : 2021-03-21

Keywords: Bayesian method, Financial stability, Econophysics Method,

Abstract :

The concept of financial sustainability has been in the economic literature for nearly two decades. In the theoretical financial literature, firm financial sustainability can be described as a financial system consisting of financial intermediaries, markets, and market infrastructures that are capable of withstanding risk shocks and resolving financial imbalances. Therefore, according to the above argument, the purpose of the present study is to present a proposed model for measuring the financial sustainability of the company by using Econophysics and artificial neural network using a sample of 132 companies listed in Tehran Stock Exchange during 2015-2019. The results of the first hypothesis show that the prediction of financial sustainability based on the Econophysics method can provide better results. Also, based on the result of the second hypothesis, the Bayesian method can predict better financial sustainability. Finally, by comparing the Econophysics and Bayesian approaches to predicting financial sustainability of the firm, it can be concluded that the prediction of financial sustainability based on the economophysical method yields better results than the Bayesian method.