ARE BANKRUPTCY MODELS A GOOD PREDICTOR OF FIRM FINANCIAL DISTRESS OF TRAVEL AGENTS IN THE CZECH REPUBLIC?
Pages: 87-93 Published: 5 Oct 2019
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Abstract: Assessing financial performance of the firm and diagnosing and predicting the potential financial distress is very important for good firm governance. The bankruptcy models are one of the relative simple methods for testing the firm financial health. This study aims to test the reliability of selected bankruptcy models as a predictor of financial distress of Czech travel agencies and tour operator. Altman Z´-Score, Z´´-Score models and index IN05 are employed as the tested bankruptcy models. The data are obtained from the database Albertina CZ Gold Edition and the final sample contains data for 368 firms which represent approximately 9 percent travel agencies and tour operators in the Czech Republic. The results show that the predictive ability of the individual bankruptcy models vary significantly for the subsector of Czech travel agencies and tour operators. Altman Z´´-Score model and index IN05 prove to be relative suitable predictor of financial distress under certain conditions. On the other hand, the reliability of Altman Z´-Score model is weak.
Keywords: tourism, tour operators, travel agencies, financial distress, bankruptcy models