A Neuro-Fuzzy Approach for Equity Valuation Based on Fundamental Analysis

Equity valuation by fundamental analysis is modeled by a neuro-fuzzy approach in this paper. This neuro-fuzzy approach is a combination of a fuzzy inference system and a neural network. The fuzzy inference system enables the analyst to qualitatively describe his/her assessment of the influential factors in equity valuation. The neural learning can identify the relation between the influential factors and the equity value through the sample data, and also obtain a quantitative description of the qualitative assessment of influential factors. Stock prices and accounting information of listed companies in Taiwan are collected as sample data for constructing the equity valuation model by the proposed approach