sourav89068/bankruptcy-classification

Annual financial data are collected for bankrupt firms approximately 2 years prior to their bankruptcy and for financially sound firms at about the same time. The data on four variables, X1=CF/TD(cash flow)/(total debt), X2=NI/TA(net income/total assets), X3=CA/CL(current assets/current liabilities), and X4= CA/NS(current assets)/(net sales).

Bankruptcy-classification

Annual financial data are collected for bankrupt firms approximately 2 years prior to their bankruptcy and for financially sound firms at about the same time. The data on four variables, X1=CF/TD(cash flow)/(total debt), X2=NI/TA(net income/total assets), X3=CA/CL(current assets/current liabilities), and X4= CA/NS(current assets)/(net sales).

EDA

Nearly equal number of firms are taken for both the classes.

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Taking x3 and x4 with x1 to see which variable will have most effect on classification.

x1 and x3 will be a better classifier than x4

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Assumption of bivariate normality

Data is scattered nearly equally around the mean and the data falls under gaussian ellipse under 95% confidence and the univariates are also look like normal. Hence there is no reason to deny that the data pairs are not bivariate normal.

To see further analysis run the codes.