Decision-making problems in the area of financial status evaluation have been considered very important. Making in- correct decisions in firms is very likely to cause financial crises and distress. Predicting going concern of factories and manufacturing companies is the desire of managers, investors, auditors, financial analysts, governmental officials, employees. This research introduces a new approach for modeling of company’s behavior based on Fuzzy Clustering Means (FCM). Fuzzy clustering is one of well-known unsupervised clustering techniques, which allows one piece of data belongs to two or more clusters. The data used in this research was obtained from Iran Stock Market and Account ing Research Database. According to the data between 2000 and 2009, 70 pairs of companies listed in Tehran Stock Exchange are selected as initial data set. Our experimental results showed that FCM approach obtains good prediction accuracy in developing a financial distress prediction model. Also, in effective features determination test the results show that features based on cash flows play more important role in clustering two classes.

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