The Effect of Covid-19 On Financial Distress: Evidence from Bist Tourism Index

Abstract

Purpose - Covid-19 which emerged in the last quarter of 2019 in Wuhan of China and spread all over the world in a short time, caused to be implemented international travel restrictions and bans. These practices have negatively affected the financial markets of the countries and many businesses, especially tourism businesses, have started to experience serious problems. With this study, it is aimed to determine the effect of Covid-19 on the financial status of businesses in the Borsa Istanbul (BIST) Tourism Index, the financial distress situations of these businesses have been tried to find out. Design/Methodology/Approach - The financial data presented to the public by tourism enterprises traded in the BIST Tourism Index between 2011 and 2020 were accessed through Finnet. In order to analyze the degree of financial distress of the enterprises, the Z score model, which has the feature of being a 4-variable and multiple discriminant model, developed by Edward Altman for service businesses in 2000 was used. Findings - As a result of the analyzes, in when started and continued of Covid-19 it was concluded that in 2019, 2 business and in 2020, 1 businesses were in the risky range in terms of financial distress the others were in the safe range. Discussion - It has been observed that the market values of the businesses in the BIST Tourism Index have increased considerably in 2020. While it was generally thought that there would be a decrease in the market values of businesses due to the crisis created by Covid-19, it was seen that the opposite situation occurred.