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http://dx.doi.org/10.5762/KAIS.2019.20.11.151

Evaluation of Distress Prediction Model for Food Service Industry in Korea : Using the Logit Analysis  

Kim, Si-Joong (Graduate School of C-MBA, Woosong University)
Publication Information
Journal of the Korea Academia-Industrial cooperation Society / v.20, no.11, 2019 , pp. 151-156 More about this Journal
Abstract
This study aims to develop a distress prediction model and to evaluate distress prediction power for the food services industry by using 2017 food service industry financial ratios. Samples were collected from 46 food service industries, and we extracted 14 financial ratios from them. The results show that, first, there are eight ratios (financial ratio, current ratio, operating income to sales, net income to assets, ratio of cash flows, income to stockholders' equity, rate of operating income, and total asset turnover) that can discriminate failures in food service industries and the top-level food service industries. Second, by using these eight financial ratios, the logit function classifies the top-level food service industries, and failures in the food service industry can be estimated by using logit analysis. The verification results as to accuracy in the estimated logit analysis indicate that the model's distress-prediction power is 89.1%.
Keywords
Distress Prediction Model; Financial Ratio Analysis; Distress Prediction Power; Food Service Industry; Logit Analysis;
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