Measuring retail company performance using credit scoring techniques

This paper discusses models for evaluating credit risk in relation to the retailing industry. Hunt’s Hunt, S.D., 2000. A General Theory of Competition. Sage Publications Inc., California] Resource–Advantage Theory of Competition is used as a basis for variable selection, given the theory’s relevancy to retail competition. The study focuses on the US retail market. Four standard credit scoring methodologies: Naïve Bayes, Logistic Regression, Recursive Partitioning and Artificial Neural Network, are compared with Sequential Minimal Optimization (SMO), using a sample of 195 healthy companies and 51 distressed firms over five time periods from 1994 to 2002.