This paper introduces compositional data analysis for financial ratios, improving industry-level analysis.
problem Statistical issues with standard financial ratios at industry level.
method Compositional data analysis techniques for financial ratios.
result Improved analysis of financial ratios using compositional data methods.
LLMs outperform human analysts in predicting earnings direction.
problem Evaluating financial statements without narrative or industry-specific information.
method Trained GPT4 on standardized, anonymous financial statements and instructed to predict earnings direction.
result LLMs predict earnings directionally with accuracy comparable to narrowly trained ML models.
Study uses VC correlation to uncover directional financial relationships.
problem Understanding causal relationships between financial variables.
method Volatility constrained correlation (VC correlation) method.
result Operating income is most influential, while market capitalization and revenue are most susceptible.
Paper proposes FinAR-Bench to evaluate LLMs in financial analysis tasks.
problem Inaccurate financial analysis by LLMs leading to investment and regulatory issues.
method Proposes FinAR-Bench, a benchmark dataset with three steps: key info extraction, financial indicator calculation, and logical reasoning.
result LLMs perform better in key info extraction and indicator calculation but struggle with logical reasoning.
The role of Network Theory in the study of the financial crisis has been widely spotted in the latest years. It has been shown how the network topology and the dynamics running on top of it can trigger the outbreak of large systemic crisis. Following this methodological perspective we introduce here the Accounting Netw…
Study introduces new financial ratios for better predicting company performance.
problem Lack of progress in predicting company performance and assessing financial risks.
method Developed new financial and macroeconomic ratios, supervised learning models, and Bayesian models.
result New proposed variables improve model accuracy and FNN performs best across multiple tasks.
Neural networks help auditors efficiently assess financial statements by learning underlying data patterns.
problem Efficiently auditing large volumes of financial statements and journal entries.
method Vector Quantised-Variational Autoencoder (VQ-VAE) neural networks.
result VQ-VAE neural networks can learn a quantized representation of accounting data, uncovering latent factors and providing a representative audit sample.
Financial statements contain quantitative information and manager's subjective evaluation of firm's financial status. Using information released in U.S. 10-K filings. Both qualitative and quantitative appraisals are crucial for quality financial decisions. To extract such opinioned statements from the reports, we built…
AI improves MSME credit scoring using bank statement data.
problem Lack of access to financing for MSMEs due to traditional credit scoring methods.
method Developed a cash flow-based pipeline using bank statement data for machine learning credit scoring.
result Bank statement features significantly improve credit scoring models, achieving AUROC of 0.806.
RESHAPE explains financial statement anomalies by aggregating explanations from AENNs.
problem Detecting and explaining accounting anomalies in financial audits is challenging.
method Proposes RESHAPE to explain model output on an aggregated attribute-level.
result RESHAPE provides more comprehensible explanations compared to existing methods.
New financial ratios using compositional data improve analysis of firm health.
problem Statistical issues with standard financial ratios, especially skewness and outliers.
method Compositional data (CoDa) methodology to analyze financial statements.
result Outliers and skewness reduced, results invariant to numerator and denominator permutation.
AI in finance uses quantum logic for better decision-making.
problem Improving financial decision-making models using AI.
method Application of quantum logic in machine learning techniques.
result Advantages of quantum-inspired neural networks in finance.
UniFinEval benchmarks financial models across text, images, and videos.
problem Challenges in evaluating financial multimodal models across text, images, and videos.
method Proposes UniFinEval, a unified multimodal benchmark for financial scenarios.
result Gemini-3-pro-preview achieves best performance but still lags behind experts.
EDINET-Bench evaluates LLMs on complex financial tasks using Japanese financial statements.
problem Challenges in evaluating LLMs on financial tasks due to specialized expertise and scarce benchmarks.
method Developed EDINET-Bench, an open-source Japanese financial benchmark for LLMs on tasks like fraud detection and earnings forecasting.
result State-of-the-art LLMs perform only marginally better than logistic regression in financial tasks, highlighting the need for more realistic benchmarks.
Study earnings calls to predict stock price movements, finding them more predictive than traditional data.
problem Improving investment decisions by analyzing earnings calls for stock price predictions.
method Graph Neural Network based approach to process and analyze earnings call transcripts.
result Earnings call transcripts are more predictive of stock price movements than traditional hard data.
Study assesses consistency and reproducibility of LLMs in finance and accounting tasks.
problem Consistency and reproducibility of LLM outputs in finance and accounting research.
method Extensive experimentation with 50 independent runs across 5 tasks using 3 OpenAI models.
result Task-specific patterns of consistency and reproducibility, with binary classification and sentiment analysis achieving near-perfect reproducibility.
Corporate distress models typically only employ the numerical financial variables in the firms' annual reports. We develop a model that employs the unstructured textual data in the reports as well, namely the auditors' reports and managements' statements. Our model consists of a convolutional recurrent neural network w…
Neural networks predict ETF performance using financial data.
problem Data shortage for ETFs.
method Train neural networks on financial statement data of individual stocks to predict ETF performance.
result Proposed method outperforms baselines.
System detects financial news temporality combining NLP and ML.
problem Separate context from predictions in financial news.
method Combines NLP and ML, extracts dominant tenses.
result High detection precision compared to baseline.
This study analyzes financial equity research reports to identify frequently asked questions and automates 80% of them.
problem Insufficient empirical analysis of questions answered in financial equity research reports.
method Analyzed 72 financial equity research reports, classifying sentences into 169 unique question archetypes. Used public corporate reports to classify questions' potential for automation.
result Approximately 80% of financial equity research reports can be automated, with 78.7% of questions automatable.
This review examines deep learning in financial fraud detection over 5 years.
problem Improving deep learning techniques for financial fraud detection.
method Systematic literature review of 57 studies using performance metrics.
result Deep learning models enhance fraud detection across various financial domains.
Accounting fraud is a global concern representing a significant threat to the financial system stability due to the resulting diminishing of the market confidence and trust of regulatory authorities. Several tricks can be used to commit accounting fraud, hence the need for non-static regulatory interventions that take …
Study uses machine learning to predict stock trends based on fundamental data.
problem Predicting stock trends using fundamental analysis.
method Used LSTM, 1D CNN, and LR models on financial data.
result Logistic Regression models outperformed other models.
Proposes a sparsity algorithm to improve corporate credit ratings.
problem Improving credit ratings of publicly traded companies.
method Formulates counterfactual explanation as an optimization problem and proposes a sparsity algorithm to maximize sparsity.
result The sparsity algorithm can capture features that improve credit ratings.
Solves the challenge of retrieving item-specific financial information from Form 10-Q filings.
problem Retrieving item-specific information from Form 10-Q filings with varying formats and machine-readable hierarchy.
method Complements a rule-based algorithm with a Convolutional Neural Network (CNN) image classifier to itemize 10-Q files.
result Demonstrates a generalized pipeline for rapid data retrieval from a large volume of textual data.
A new space-time model for interacting agents on the financial market is presented. It is a combination of the Curie-Weiss model and a space-time model introduced by Järpe 2005. Properties of the model are derived with focus on the critical temperature and magnetization. It turns out that the Hamiltonian is a sufficien…
Out of the companies, Dolby is the company with the best overall financial and operation health. According to the table that accounted its financial statements for the past three years, Dolby has stable profit margins that generates a revenue in the billions, the only company in ten figures. Corporate competition to ga…
Improved investment performance with fine-grained LLM tasks.
problem Abstract financial trading systems often overlook real-world workflow intricacies, leading to degraded performance.
method Proposes a multi-agent LLM trading framework that decomposes investment analysis into fine-grained tasks.
result Fine-grained task decomposition significantly improves risk-adjusted returns compared to coarse-grained designs.
GC 2022 challenges real-time trend detection in financial tick data.
problem Efficiently detect trading trends in high-volume financial tick data.
method Real-time complex event processing of tick data, focusing on trend indicators and patterns.
result Participants must build reusable and practical solutions for real-life trading decisions.
This study proposes a new model for predicting financial distress in SMEs using machine learning.
problem Challenges in predicting financial distress for SMEs due to ambiguity and limited data.
method Feature selection algorithm based on element credits and data source collection. Incorporates financial statements, governance qualities, and market data with a Relevant Vector Machine.
result The proposed model improves financial distress prediction efficiency with fewer characteristic factors.
Study evaluates neural networks for corporate credit rating assessment.
problem Improving machine learning algorithms for credit assessment.
method Analysis of four neural network architectures (MLP, CNN, CNN2D, LSTM) on financial data from energy, financial, and healthcare sectors.
result LSTM architecture consistently outperforms others in predicting corporate credit ratings.
Narrative disclosures in 10-K filings improve bankruptcy prediction beyond accounting ratios.
problem Traditional bankruptcy prediction models rely on accounting ratios, which may not capture early warning signals.
method Developed a PB Stress Score based on distress-specific language in 10-K narratives, evaluated against accounting and dictionary benchmarks.
result Adding the PB Stress Score increases AUC from 0.8323 to 0.9019 and improves top-decile bankruptcy capture from 44.12% to 64.71%.
CCR-CNN uses CNN to predict corporate credit ratings from financial data.
problem Lack of data and limited model performance in predicting corporate credit ratings.
method Transform corporations into images and use CNN to analyze complex feature interactions.
result CCR-CNN outperforms state-of-the-art methods in predicting corporate credit ratings.
We propose a novel approach for sampling realistic financial correlation matrices. This approach is based on generative adversarial networks. Experiments demonstrate that generative adversarial networks are able to recover most of the known stylized facts about empirical correlation matrices estimated on asset returns.…
Predict stock price movements using financial data and news articles with LLMs.
problem Predicting stock price movements using financial data and news articles.
method Combining financial data and news articles, employing pre-trained LLMs, and using retrieval augmentation techniques.
result Predicted stock price movements with a weighted F1-score of 58.5% and 59.1%.
System detects relevant financial news and predictions from unstructured text.
problem Manual extraction of relevant financial information from news is cumbersome and error-prone.
method Topic modeling with LDA, co-reference resolution, multi-paragraph segmentation, and temporal analysis.
result ROUGE-L values for relevant text and predictions/forecasts were 0.662 and 0.982, respectively.
Sell-side analysts' reports explain 10% of stock returns, with income statement analyses most impactful.
problem The value of sell-side analysts' information in predicting stock returns.
method Analysis of large language model embeddings and Shapley value decomposition.
result Income statement analyses contribute most to explaining stock returns.
Meta-learning framework for credit risk assessment of SMEs, aligning financial statement dates with evaluation dates.
problem Temporal misalignment of credit scoring models leading to bias and inconsistent predictions.
method Two-step temporal decomposition: static model for annual PDs, dynamic model for monthly PDs; stacking architecture to aggregate multiple models.
result Framework effectively captures credit risk evolution over time, improving temporal consistency and predictive stability.
The Minority Game is a generic model of competing adaptive agents, which is often believed to be a model of financial markets. We discuss to which extend this is a reasonable statement, and present minimal modifications that make this model reproduce stylized facts. The resulting model shows that without speculators, p…
Paper shows equivalence between two dividend preference models.
problem Understanding investor and firm preferences for dividends.
method Formulated Epstein-Zin preference, proved equivalence with Maenhout's model.
result Robust dividend policy is equivalent to a threshold strategy based on surplus process.
We give simple homological conditions for a rational homology 3-sphere Y to have infinite order in the rational homology cobordism group, and for a collection of rational homology spheres to be linearly independent. These translate immediately to statements about knot concordance when Y is the branched double cover of …
Audit fees change based on company and economic factors during auditor switching.
problem Understanding how audit fees change when auditors switch firms.
method Examined the impact of auditor switching on audit fees, considering company characteristics and economic data.
result The direction and magnitude of audit fee changes during switching depend on economic stability and company characteristics.
We report a data mining pipeline and subsequent analysis to understand the core periphery power structure created in three national newspapers in Bangladesh, as depicted by statements made by people appearing in news. Statements made by one actor about another actor can be considered a form of public conversation. Name…
Develops a new essential supremum concept for financial models.
problem Uncertainty in financial models with non-dominated, non-compact probability measures.
method Introduces quasi-sure essential supremum for real-valued functions and proves its properties.
result Bi-dual characterization of super-hedging cost and new results on aggregation of quasi-sure statements.
The Comment cond-mat/0503325 is built around two core statements, both of which are plainly incorrect.
Accounting frameworks follow stipulations of existing Accounting Theories. This exploratory research sets out to trace the evolution of accounting theories of Charge and Discharge Syndrome and the Corollary of Double Entry. Furthermore, it dives into the theories of Income Determination, garnishing it with areas of div…
Improved financial sentiment analysis using simple instruction tuning of LLMs.
problem Lack of accurate financial sentiment analysis by large language models.
method Instruction tuning of general-purpose LLMs with a small portion of financial sentiment data.
result Significant improvement in financial sentiment analysis, especially in complex scenarios.
Intelligent financial data analysis system improves accuracy and efficiency.
problem Inefficient and inaccurate financial data analysis due to complex data and evolving contexts.
method Integrates LLMs with RAG technology for financial data analysis.
result Significant improvements in accuracy and recall (78.6% and 89.2%) compared to baseline.