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The constant change in the components and variables of the economic environment is one of the most important phenomena that characterize this environment at present, and these changes have made the goal of survival in the market a priority due to the prevalence of financial distress in companies. The main purpose of this paper is to test the impact and effectiveness of the model of artificial neural networks and Naive Bayes technology and to see how accurate they are and their ability to classify companies. In this paper, the information of the companies listed on the Iraq stock exchange for 2017, which represents 36 companies with high financial distress, 20 companies with medium financial distress, in addition to 43 non-distressed companies for a group of 99 companies. According to the experimental results, the model of artificial neural networks gives the highest rating accuracy of 96.97% and an error rate compared to Naive Bayes, which gave a rating accuracy of 74.74%. [ABSTRACT FROM AUTHOR]

Financial markets are currently a key source of growth for the local and international economies, as they are the means by which economic units are fed. Iraq is one of the countries attempting to improve and modernize its financial industry in order to stay up with technology advancements and the digital revolution. Forecasting and early detection of financial distress is one of the important methods that contribute to increasing confidence between investors and the market and help to make sound decisions in a timely manner in order to avoid reaching bankruptcy. This paper aims to employ smart models in the detection of financial distress, and to select the best model capable of classifying the financial situation of companies into three categories (non-distress, medium distress and high distress) by selecting (14) financial ratio that directly affects the situation of companies. The researcher used artificial neural networks algorithms such as the reverse error propagation algorithm, Using data mining methods and deep learning algorithms, the C4.5 algorithm, Naive Bayes simple classifier algorithm, Convolutional neural networks algorithm, and a multi-layered algorithm support vector machine were used to classify a company's financial state. The C4.5 method and SVM had the highest rating accuracy by a tiny margin in all levels (98, 96.9, and 91.9) respectively, according to the results of the analysis. The most essential recommendations included the fundamental requirement of using smart technology in recognizing financial challenges of companies in order to support and consolidate the economic stability of enterprises in particular and the market in general in the adoption of the Iraqi stock market. [ABSTRACT FROM AUTHOR]