This study estimated a multivariate discriminant model for predicting hospitality
firm bankruptcy. The model has a 93 per cent accuracy in classifying the
in-sample firms into bankrupt and non-bankrupt firms. The model suggests that
unprofitable firms burdened with debts, short-term debts in particular, are more
likely to be candidates for bankruptcy. Fast expansion and sales growth of those
firms may increase their bankruptcy likelihood.
AdamsD.
J. (1995)
‘Methods for predicting financial failure in the hotel
industry’, in HarrisP.
(ed.) ‘Accounting and Finance for the International Hospitality
Industry’,
Butterworth-Heinemann,
Oxford.
AltmanE.
I. (1968)
‘Financial ratios, discriminant analysis and the
prediction of corporate bankruptcy’, Journal
of Finance, September, 23, 4,
589–607.
4.
AltmanE.
I.HaldemanG.NarayananP.
(1977) ‘Zeta analysis: A new model to
identify bankruptcy risk of corporations’,
Journal of Banking and Finance, June, 1,
1, 29–54.
5.
ArgentiJ.
(1976) ‘Corporate Collapse: The Causes and
Symptoms’, John Wiley &
Sons, New York.
6.
AzizA.EmanuelD. C.LawsonG.
H. (1988)
‘Bankruptcy prediction — An investigation of
cash flow based models’, Journal of
Management Studies, September, 25,
5, 419–437.
7.
BeaverW.
G. (1966)
‘Financial ratios as predictors of
failure’, Empirical Research in Accounting:
Selected Studies, 1967, supplement to, Journal of
Accounting Research, 571–102.
8.
Bloomberg
(1998) ‘After eight years of growth, profits
slow for U.S. hotels’, Business Section, http://www.lvrj.com, 28th December.
9.
BlumM.
(1974) ‘Failing company discriminant
analysis’, Journal of Accounting
Research, Spring, 12, 1,
1–25.
10.
DambolenaI.
G.KhouryS.
J. (1980)
‘Ratio stability and corporate
failure’, Journal of Finance,
35, 4,
1017–1026.
11.
DeakinE.
B. (1972)
‘A discriminant analysis of predictors of business
failure’, Journal of Accounting
Research, Spring,
167–179.
12.
DimitrasA.
I.ZanakisS. H.ZopounidisC.
(1996) ‘A survey of business failure with
an emphasis on prediction methods and industrial
application’, European Journal of Operational
Research, May, 90, 3,
487–513.
13.
Dun & Bradstreet Corporation
(1992-1997) ‘Business Failure
Record’, New York.
14.
EdmisterR.
O. (1972)
‘An empirical test of financial ratio analysis for
small business prediction’, Journal of
Financial and Quantitative Analysis, March, 7,
2, 1477–1493.
15.
FulmerJ.
G.MoonJ. E.GavinT. A.ErwinJ.
M. (1984)
‘A bankruptcy classification model for small
firms’, Journal of Commercial Bank
Lending, July,
25–37.
16.
GahlonJ.
M.VigelandR.
L. (1988)
‘Early warning signs of bankruptcy using cash flow
analysis’, Journal of Commercial Bank
Lending, December, 71, 4,
4–15.
17.
GardinerL.OswaldS. L.JaheraJ.
S. (1996)
‘Prediction of hospital failure: A post-PPS
analysis’, Hospital & Health Services
Administration, Winter, 41, 4,
441–460.
18.
GoldsteinM.DillonW.
R. (1978)
‘Discrete Discriminant Analysis’,
John Wiley & Sons,
New York.
19.
KleckaW.
R. (1985)
‘Discriminant Analysis’, Sage
Publications, Beverly Hills and
London.
20.
KwansaF.
A.ParsaH.
G. (1991)
‘Business failure analysis: An events
approach’, Hospitality Research Journal (Proceedings
of the 1991 Annual Conference of the Council on Hotel, Restaurant and
Institutional Education),
23–34.
21.
OlsenM.BellasC.KishL.
V. (1983)
‘Improving the prediction of restaurant failure
through ratio analysis’, International
Journal of Hospitality Management, 2,
4, 187–193.
22.
RomeoP.
(1997) ‘Strange time upon
us’, Restaurant Business, July,
96, 14, 6.
23.
RujoubM.
A.CookD. M.HayL.
E. (1995)
‘Using cash flow ratios to predict business
failure’, Journal of Management
Issues, Spring, 7, 1,
75–90.
24.
RushmoreS.
(1998) ‘Get ready for another round of
overbuilding’, Lodging Hospitality,
February, 54, 2, 10.
25.
Smith Travel Research
(1998) ‘Lodging Survey’,
Gallatin.
26.
SummersM.
S. (1989)
‘Bankruptcy Explained: A Guide for Business’,
John Wiley & Sons,
New York.
27.
TafflerR.
(1982) ‘Forecasting company failure in
the UK using discriminant analysis and financial ratio
data’, Journal of the Royal Statistical
Society, 145 (Part 3),
342–348.
28.
TafflerR.TisshawH.
(1977) ‘Going, going, going — Four
factors which predict?’Accountancy88, 50–54.
29.
TavlinE.
M.MoncarzE.DumontD.
(1989) ‘Financial failure in the
hospitality industry’, FIU Review,
7, 1,
55–75.
30.
WhittingtonG.
(1980) ‘Some basic properties of
accounting ratios’, Journal of Business
Finance and Accounting, Summer,
219–223.
31.
Van HorneJ.
C. (1998)
‘Financial Management and Policy’,
Prentice Hall, Upper Saddle
River, NJ.
32.
ZmijewskiM.
D. (1984)
‘Methodological issues related to the estimation of
financial distress prediction models’,
Journal of Accounting Research, 22
(supplement), 59–86.
