• Journal of Korea Water Resources Association
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• v.54 no.8
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• pp.577-587
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• 2021

Drought is generally considered to be a natural disaster caused by accumulated water shortages over a long period of time, taking months or years and slowly occurring. However, climate change has led to rapid changes in weather and environmental factors that directly affect agriculture, and extreme weather conditions have led to an increase in the frequency of rapidly developing droughts within weeks to months. This phenomenon is defined as 'Flash Drought', which is caused by an increase in surface temperature over a relatively short period of time and abnormally low and rapidly decreasing soil moisture. The detection and analysis of flash drought is essential because it has a significant impact on agriculture and natural ecosystems, and its impacts are associated with agricultural drought impacts. In South Korea, there is no clear definition of flash drought, so the purpose of this study is to identify and analyze its characteristics. In this study, flash drought detection condition was presented based on the satellite-derived drought index Evaporative Stress Index (ESI) from 2014 to 2018. ESI is used as an early warning indicator for rapidly-occurring flash drought a short period of time due to its similar relationship with reduced soil moisture content, lack of precipitation, increased evaporative demand due to low humidity, high temperature, and strong winds. The flash droughts were analyzed using hydrometeorological characteristics by comparing Standardized Precipitation Index (SPI), soil moisture, maximum temperature, relative humidity, wind speed, and precipitation. The correlation was analyzed based on the 8 weeks prior to the occurrence of the flash drought, and in most cases, a high correlation of 0.8(-0.8) or higher(lower) was expressed for ESI and SPI, soil moisture, and maximum temperature.

• Journal of Intelligence and Information Systems
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• v.21 no.4
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• pp.111-131
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• 2015

There are only a handful number of research conducted on pattern analysis of corporate distress as compared with research for bankruptcy prediction. The few that exists mainly focus on audited firms because financial data collection is easier for these firms. But in reality, corporate financial distress is a far more common and critical phenomenon for non-audited firms which are mainly comprised of small and medium sized firms. The purpose of this paper is to classify non-audited firms under distress according to their financial ratio using data mining; Self-Organizing Map (SOM). SOM is a type of artificial neural network that is trained using unsupervised learning to produce a lower dimensional discretized representation of the input space of the training samples, called a map. SOM is different from other artificial neural networks as it applies competitive learning as opposed to error-correction learning such as backpropagation with gradient descent, and in the sense that it uses a neighborhood function to preserve the topological properties of the input space. It is one of the popular and successful clustering algorithm. In this study, we classify types of financial distress firms, specially, non-audited firms. In the empirical test, we collect 10 financial ratios of 100 non-audited firms under distress in 2004 for the previous two years (2002 and 2003). Using these financial ratios and the SOM algorithm, five distinct patterns were distinguished. In pattern 1, financial distress was very serious in almost all financial ratios. 12% of the firms are included in these patterns. In pattern 2, financial distress was weak in almost financial ratios. 14% of the firms are included in pattern 2. In pattern 3, growth ratio was the worst among all patterns. It is speculated that the firms of this pattern may be under distress due to severe competition in their industries. Approximately 30% of the firms fell into this group. In pattern 4, the growth ratio was higher than any other pattern but the cash ratio and profitability ratio were not at the level of the growth ratio. It is concluded that the firms of this pattern were under distress in pursuit of expanding their business. About 25% of the firms were in this pattern. Last, pattern 5 encompassed very solvent firms. Perhaps firms of this pattern were distressed due to a bad short-term strategic decision or due to problems with the enterpriser of the firms. Approximately 18% of the firms were under this pattern. This study has the academic and empirical contribution. In the perspectives of the academic contribution, non-audited companies that tend to be easily bankrupt and have the unstructured or easily manipulated financial data are classified by the data mining technology (Self-Organizing Map) rather than big sized audited firms that have the well prepared and reliable financial data. In the perspectives of the empirical one, even though the financial data of the non-audited firms are conducted to analyze, it is useful for find out the first order symptom of financial distress, which makes us to forecast the prediction of bankruptcy of the firms and to manage the early warning and alert signal. These are the academic and empirical contribution of this study. The limitation of this research is to analyze only 100 corporates due to the difficulty of collecting the financial data of the non-audited firms, which make us to be hard to proceed to the analysis by the category or size difference. Also, non-financial qualitative data is crucial for the analysis of bankruptcy. Thus, the non-financial qualitative factor is taken into account for the next study. This study sheds some light on the non-audited small and medium sized firms' distress prediction in the future.