The prediction of business failure in the hospitality business

Identifier:  imarina:6488973

Handle: https://hdl.handle.net/20.500.11797/imarina6488973

Authors:  Alvarez-Ferrer, Antonio; Campa-Planas, Fernando

Abstract:
The main goal of this study is to carry out an analysis about the bankrupt of companies in the hospitality sector in Spain from 2007 to 2017, applying prediction formulas of business failure. The development of models for insolvency prediction began in the United States with the pioneering works of Beaver and Altman in the 1960s. After years of methodological improvements and studies applied to different sectors, it has not been possible to unify a method applicable by the Academia. Therefore, the realization of this study has been using the formula Z of Altman of 1968 and 1983 and compare them with the formula Z of Amat et al. of 2017. The two methods of Z-Score applied to the companies of the hospitality sector in Spain in bankruptcy process show us a highly percentage of matches in the exercises before the official bankruptcy process, being Altman the one that obtains a better approach to the total number of bankruptcy companies.