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International Journal of Creative and Open Research in Engineering and Management

A Peer-Reviewed, Open-Access International Journal Supporting Multidisciplinary Research, Digital Publishing Standards, DOI Registration, and Academic Indexing.
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ISSN: 3108-1754 (Online)
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ISO Certification: 9001:2015
Publication Fee: 599/- INR
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License: CC BY 4.0
Peer Review: Double Blind
Volume 02, Issue 04

Published on: April 2026

AN INTELLIGENT FRAMEWORK FOR PREDICTING BANKRUPTCY THROUGH HYBRID MACHINE LEARNING METHODS

Ganda Samitha

K Naresh

Department of MCA, Annamacharya Institute of Technology and Sciences, Tirupati, Andhra Pradesh, India

Article Status

Plagiarism Passed Peer Reviewed Open Access

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Abstract

Bankruptcy prediction plays a vital role in financial risk management by identifying companies that may face financial distress in the future. Early prediction helps investors, financial institutions, and policymakers take preventive actions and minimize financial losses. Traditional statistical methods often fail to capture complex relationships among financial indicators, which limits their prediction capability. To overcome this challenge, this study proposes a bankruptcy prediction system using hybrid machine learning techniques. The system analyzes various financial ratios and organizational indicators to classify companies as bankrupt or non-bankrupt. Data preprocessing techniques such as normalization and feature selection are applied to improve model performance. Multiple machine learning algorithms are integrated to form a hybrid model that enhances prediction accuracy and reliability. The experimental results demonstrate that the proposed model achieves an accuracy of 96.83% and an AUC score of 98.68%, indicating strong classification performance. In addition, a web-based interface is developed to allow users to train models, view datasets, and perform real-time bankruptcy predictions. The proposed system provides an effective decision-support tool for financial risk assessment and corporate sustainability analysis

How to Cite this Paper

Samitha, G. (2026). An Intelligent Framework for Predicting Bankruptcy Through Hybrid Machine Learning Methods. International Journal of Creative and Open Research in Engineering and Management, <i>02</i>(04). https://doi.org/10.55041/ijcope.v2i4.065

Samitha, Ganda. "An Intelligent Framework for Predicting Bankruptcy Through Hybrid Machine Learning Methods." International Journal of Creative and Open Research in Engineering and Management, vol. 02, no. 04, 2026, pp. . doi:https://doi.org/10.55041/ijcope.v2i4.065.

Samitha, Ganda. "An Intelligent Framework for Predicting Bankruptcy Through Hybrid Machine Learning Methods." International Journal of Creative and Open Research in Engineering and Management 02, no. 04 (2026). https://doi.org/https://doi.org/10.55041/ijcope.v2i4.065.

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References

[1] E. I. Altman, “Financial Ratios, Discriminant Analysis and the Prediction of Corporate Bankruptcy,” Journal of Finance, vol. 23, no. 4, pp. 589–609, 1968.

[2] J. A. Ohlson, “Financial Ratios and the Probabilistic Prediction of Bankruptcy,” Journal of Accounting Research, vol. 18, no. 1, pp. 109–131, 1980.

[3] S. Lessmann, B. Baesens, H. V. Seow, and L. C. Thomas, “Benchmarking State-of-the-Art Classification Algorithms for Credit Scoring: An Update of Research,” European Journal of Operational Research, vol. 247, no. 1, pp. 124–136, 2015.

[4] L. Zhou, K. K. Lai, and J. Yen, “Empirical Models Based on Features Ranking Techniques for Corporate Bankruptcy Prediction,” Computers & Mathematics with Applications, vol. 64, no. 8, pp. 2484–2496, 2012.

[5] I. H. Witten, E. Frank, and M. A. Hall, Data Mining: Practical Machine Learning Tools and Techniques, 3rd ed., Morgan Kaufmann, 2011.

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  • All submissions are screened under plagiarism detection.
  • Review follows editorial policy.
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  • Peer Review Type: Double-Blind Peer Review
  • Published on: Apr 06 2026
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