SMEs probability of default: the case of the hospitality sector
In this paper we analyze a set of financial ratios from hospitality sector SMEs in order to ascertain which factors determine a greater probability of default. We choose the hospitality sector due to its importance in the Portuguese economy and has been particularly affected by the recent econom...
Saved in:
| Main Author: | |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
University of Algarve, ESGHT/CINTURS
2015-01-01
|
| Series: | Tourism & Management Studies |
| Subjects: | |
| Online Access: | https://tmstudies.net/index.php/ectms/article/view/770/1300 |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| _version_ | 1832569517670137856 |
|---|---|
| author | Luís Pacheco |
| author_facet | Luís Pacheco |
| author_sort | Luís Pacheco |
| collection | DOAJ |
| description | In this paper we analyze a set of financial ratios from hospitality
sector SMEs in order to ascertain which factors determine a greater
probability of default. We choose the hospitality sector due to its
importance in the Portuguese economy and has been particularly
affected by the recent economic downturn and austerity measures
and because, to the best of our knowledge, this sector has never
been the object of such a study. Usually the literature seeks to find a
set of variables which are significant in the estimation of default
and multiple discriminant analysis and logit methodology are the
main avenues of research on this area. Our data was collected from
SABI and we followed logit methodology. Our results recommend
that in ascertaining the creditworthiness of borrowers only debt
and equity variables appear to be relevant to explaining failure, and
overreliance on profit as an indication of good financial
performance should be limited. The main reason for our rather
poor results could be from problems with the data quality, possibly
since the accounts published by firms aren’t reliable and tend to
present negative results. |
| format | Article |
| id | doaj-art-476f99d469ce43f08ea122e5c1e583e3 |
| institution | Kabale University |
| issn | 2182-8466 |
| language | English |
| publishDate | 2015-01-01 |
| publisher | University of Algarve, ESGHT/CINTURS |
| record_format | Article |
| series | Tourism & Management Studies |
| spelling | doaj-art-476f99d469ce43f08ea122e5c1e583e32025-02-02T20:50:00ZengUniversity of Algarve, ESGHT/CINTURSTourism & Management Studies2182-84662015-01-01111153159SMEs probability of default: the case of the hospitality sectorLuís Pacheco0Portucalense University, Department of Economics, Management and Computer Sciences, Rua Dr. António Bernardino de Almeida, 541-619, 4200 – 072 Porto, PortugalIn this paper we analyze a set of financial ratios from hospitality sector SMEs in order to ascertain which factors determine a greater probability of default. We choose the hospitality sector due to its importance in the Portuguese economy and has been particularly affected by the recent economic downturn and austerity measures and because, to the best of our knowledge, this sector has never been the object of such a study. Usually the literature seeks to find a set of variables which are significant in the estimation of default and multiple discriminant analysis and logit methodology are the main avenues of research on this area. Our data was collected from SABI and we followed logit methodology. Our results recommend that in ascertaining the creditworthiness of borrowers only debt and equity variables appear to be relevant to explaining failure, and overreliance on profit as an indication of good financial performance should be limited. The main reason for our rather poor results could be from problems with the data quality, possibly since the accounts published by firms aren’t reliable and tend to present negative results.https://tmstudies.net/index.php/ectms/article/view/770/1300financial managementhospitality sectorsmelogit modelsdefault modeling |
| spellingShingle | Luís Pacheco SMEs probability of default: the case of the hospitality sector Tourism & Management Studies financial management hospitality sector sme logit models default modeling |
| title | SMEs probability of default: the case of the hospitality sector |
| title_full | SMEs probability of default: the case of the hospitality sector |
| title_fullStr | SMEs probability of default: the case of the hospitality sector |
| title_full_unstemmed | SMEs probability of default: the case of the hospitality sector |
| title_short | SMEs probability of default: the case of the hospitality sector |
| title_sort | smes probability of default the case of the hospitality sector |
| topic | financial management hospitality sector sme logit models default modeling |
| url | https://tmstudies.net/index.php/ectms/article/view/770/1300 |
| work_keys_str_mv | AT luispacheco smesprobabilityofdefaultthecaseofthehospitalitysector |