Mixed Financial Forecasting Index System Construct and Financial Forecasting Study on the C4.5 Decision Tree

Abstract

The current research to construct financial risk forecasting model is base on a suppose: accounting information is real. But the action of enterprise profit control makes the application of financial risk forecasting system lack significance. Hence, this paper introduces non-financial index into financial risk forecasting system to establish mix financial index evaluation system including financial index and non-financial index, and also introduces C4.5 decision tree arithmetic into the modeling process. It also conducts an empirical analysis of listed companies' financial risk model using the data of 2005 years and 2006 years. The result shows that: the forecasting capability of mix financial index model is better than the model only using financial index. Keywords—non-financial index, mix financial index, C4.5 decision tree, financial forecasting