Artificial Neural Network Based Model to Estimate Profit for SMEs

The behavior of any company is highly complicated. This work aims to evaluate of financial performance of a sector-specific business. Numerous financial indicators can be considered, but they often bear only a weak relationship to output performance. Several efforts have been made by researchers to establish stronger input–output relationships. Neural networks provide a powerful technique to capture such relationships, as they can handle non-linearities with ease. This study employs an Artificial Neural Network (ANN)–based model to estimate profit using four independent parameters for small and medium enterprises (SMEs). The output obtained shows a lower error rate compared with traditional Regression Analysis. The established relationship offers deeper insights into the intricate behavior of the sector, allowing for a more precise analysis of the criticality of parameters under consideration. The findings may be useful to companies, board members, shareholders, and entrepreneurs.