JEFMS Journal

ABSTRACT:

The pandemic raised questions about the strength and weaknesses of some sectors of activity. This article aims to determine the impact of the Covid-19 pandemic on Portuguese companies according to the values obtained in calculating liquidity, profitability and structure/debt ratios. One studied a sample of 15,367 companies operating between 2018 and 2020. Two aspects are highlighted in this study: i) the liquidity and profitability of companies fell, in most sectors, a fact that worsened the capital structure of companies and increased their degree of indebtedness, and ii) there were negative and positive impacts for different sectors of activity. Those most affected by the pandemic were tourism and public administration activities. Those least affected were the agriculture and information and communication activities. This study identifies the sectors in which public support policies were successful and those that should receive special attention given their contribution to the Portuguese Gross Domestic Product.

KEYWORDS:

Covid-19; sectorial economic impact; financial reports; financial autonomy; liquidity ratios; economic ratios; financial ratios; solvency ratios; return on equity; return on assets; public policies supporting companies.

REFERENCES:

1) Altman, E. (1968) ‘Financial ratios, discriminant analysis and the prediction of corporate bankruptcy’, Journal of Finance, Vol. 23, pp. 589-609. http://dx.doi.org/10.1111/j.1540-6261.1968.tb00843.x

2) Amendola, A., Giordano, F., Parrella, M. and Restaino, M. (2017) ‘Variable selection in high-dimensional regression: a nonparametric procedure for business failure prediction’, Applied Stochastic Methods in Business and Industry, Vo. 33 No.4, pp. 355-368. https://doi.org/10.1002/asmb.2240

3) Breia, A.F., Mata, M.N. and Pereira, V. (2014) Análise Económica e Financeira [Economic and Financial Analysis], Reis dos Livros, Sintra.

4) Banco de Portugal. (2020a) Boletim Estatístico dez.2020 [online: Statistical Bulletin Dec.2020]. https://www.bportugal.pt/sites/default/files/anexos/pdf-boletim/bedez20.pdf (Accessed 13 July 2022)

5) Banco de Portugal. (2020b) Boletim Económico dez.2020 [online: Economic Bulletin Dec.2020]. https://www.bportugal.pt/sites/default/files/anexos/pdf-boletim/be_dez2020_p.pdf (Accessed 13 July 2022)

6) Banco de Portugal. (2021a) Boletim Económico – A Economia Portuguesa em 2020 [online: Economic Bulletin – The Portuguese Economy in 2020]. https://www.bportugal.pt/sites/default/files/anexos/pdf-boletim/be_mai2021_p.pdf (Accessed 13 July 2022)

7) Banco de Portugal. (2021b) Boletim Económico dez.2021 [online: Economic Bulletin Dec.2021]. https://www.bportugal.pt/sites/default/files/anexos/pdf-boletim/be_dez2021_p.pdf (Accessed 13 July 2022)

8) Bastos, C.F.S. (2018) Finanças Empresariais - Teoria e Prática, 2nd ed., [Corporate Finance - Theory and Practice], Edições Sílabo, Lisbon.

9) Beaver, W.H. (1966) ‘Financial ratios as predictors of failure’, Journal of Accounting Research, Vol. 4, pp. 71–111. https://doi.org/10.2307/2490171

10) BMEP. (2020) Boletim Mensal de Economia Portuguesa, 12 [online: Monthly Bulletin of Portuguese Economy, 12]. https://www.gee.gov.pt/pt/lista-publicacoes/boletim-mensal-de-economia-portuguesa/2020-8/BMEP-dezembro2020.pdf/9242-bmep-n-12-2020/file (Accessed 13 July 2022)

11) Bpstat. (2020) O Banco de Portugal e a COVID-19. [online]. https://www.bportugal.pt/page/o-banco-de-portugal-e-o-covid-19 (Accessed 13 July 2022)

12) CAE. (2007) Classificação Portuguesa das Atividades Económicas [online: Portuguese Classification of the Economic Activities]. Instituto Nacional de Estatística. https://www.ine.pt/ine_novidades/semin/cae/CAE_REV_3.pdf (Accessed 13 July 2022)

13) Caetano, M. (2022) Teletrabalho atingiu nível mais baixo da pandemia no fim de 2021. [online]. https://www.dinheirovivo.pt/economia/teletrabalho-atingiu-nivel-mais-baixo-da-pandemia-no-fim-de-2021-14573094.html (Accessed 13 July 2022)

14) Cantuche, J.M.R. (2021) ‘The economy of the European Union in times of COVID-19’, Revista Galega de Economía, Vol. 30 No.1, pp. 1-17. https://doi.org/10.15304/rge.30.1.7663

15) CMVM. (2021) Estatísticas periódicas. Indicadores mensais do mercado de capitais português. Dezembro. [online]. Comissão de Mercado de Valores Mobiliários. [online]. https://www.cmvm.pt/pt/Estatisticas/EstatisticasPeriodicas/IndicadoresMensaisDoMercadoDeCapitaisPortugues/Pages/Dezembro2021.aspx?shpage=IndicadoresMensaisDoMercadoDeCapitaisPortugues (Accessed 13 July 2022)

16) Cunha, S. (2021) As tendências para o setor bancário na Era Pós-Covid-19. Unpublished Master’s thesis. ISAG – European Business School, Porto, Portugal.

17) Deloitte (2021) Tracking economic and industry trends amidst COVID-19. [online]. https://www2.deloitte.com/content/dam/Deloitte/in/Documents/risk/in-risk-tracking-COVID-19-Dashboard-October-2021-noexp.pdf (Accessed 13 July 2022)

18) Elnahas, A.M., Hassan, M.K. and Ismail, G.M. (2017) ‘Religion and mergers and acquisitions contracting: the case of earnout agreements’, Journal of Corporate Finance, Vol. 42, pp. 221-246. https://dx.doi.org/10.2139/ssrn.2800794

19) Endri, E., Sumarno, A. and Saragi, H. (2020) ‘Analysis of financial performance: evidence from food and beverage companies in Indonesia’, International Journal of Advanced Science and Technology, Vol. 29 No.5, pp. 4199-4208.

20) Farinha, M.M.D. (2021) A Análise Económica e Financeira das Empresas Vitivinícolas: As Empresas Portuguesas da Península de Setúbal. Unpublished Master’s thesis. IPS - Instituto Politécnico de Setúbal, Setúbal, Portugal.

21) Fernandes, C., Peguinho, C., Vieira, E. and Neiva, J. (2019) Análise Financeira- Teoria e Prática - Aplicação no âmbito do SNC, [Financial Analysis - Theory and Practice - Application within the SNC], Edições Sílabo, Lisbon.

22) García, M.A., Xospa, A.C. and Acosta, Á.S. (2022) ‘Solvencia y liquidez financiera de empresas familiares mexicanas antes y durante el Covid-19’, Opuntia Brava, Vol. 14 No.1, pp. 63-73.

23) Guo, C., Chan, S. H. T., Lin, C., Zeng, Y., Bo, Y., Zhang, Y., Hossain, S., Chan, J. W.M., Yeung, D. W., Lau, A. K. H. and Lao, X. Q. (2021) ‘Physical distancing implementation, ambient temperature and Covid-19 containment: an observational study in the United States’, Science of The Total Environment, Vol. 789, 147876. https://doi.org/10.1016/j.scitotenv.2021.147876

24) Harahap, I.M. (2018) Impact of Bank Performance on Profitability. [online]. https://www.semanticscholar.org/paper/Impact-of-Bank-Performance-on-Profitability Harahap/1126c5c773d1afa25993a66945851b6c6d5b64ed (Accessed 5 July 2022)

25) Hwang, H. and Höllerer, M.A. (2020) ‘The COVID-19 crisis and its consequences: ruptures and transformations in the global institutional fabric’, Journal of Applied Behavioral Sciences, Vol. 56 No.3, pp. 294-300. https://doi.org/10.1177/0021886320936841

26) INE. (2020a) Síntese Económica de Conjuntura, June 17. Instituto Nacional de Estatística. [online]. https://www.ine.pt/xportal/xmain?xpid=INEandxpgid=ine_destaquesandDESTAQUESdest_boui=414804863andDESTAQUESmodo=2 (Accessed 13 July 2022)

27) INE. (2020b) Síntese Económica de Conjuntura, July 21. Instituto Nacional de Estatística. [online]. https://www.ine.pt/xportal/xmain?xpid=INEandxpgid=ine_destaquesandDESTAQUESdest_boui=444304385andDESTAQUESmodo=2 (Accessed 13 July 2022)

28) INE. (2020c) Síntese Económica de Conjuntura, November 26. Instituto Nacional de Estatística. [online]. https://www.ine.pt/xportal/xmain?xpid=INEandxpgid=ine_destaquesandDESTAQUESdest_boui=465947263andDESTAQUESmodo=2 (Accessed 13 July 2022)

29) INE. (2021) Síntese Económica de Conjuntura, March 17. Instituto Nacional de Estatística. [online]. https://www.ine.pt/xportal/xmain?xpid=INEandxpgid=ine_destaquesandDESTAQUESdest_boui=465807415andDESTAQUESmodo=2 (Accessed 13 July 2022)

30) Kaplan, R. S. and Norton, D. (2008) ‘Mastering the Management System’, Harvard Business Review, Vol. 86 No.1, pp. 62-77.

31) Lartey, V., Antwi, S. and Boadi, E. (2013) ‘The relationship between liquidity and profitability of listed banks in Ghana’, International Journal of Business and Social Science, Vol. 4 No.3, pp. 12-34.

32) López, F.J. and Sanz, I.P. (2015) ‘Bankruptcy visualization and prediction using neural networks: a study of U.S. commercial banks’, Expert Systems with Applications, Vol. 42 No.6, pp. 2857-2868. https://doi.org/10.1016/j.eswa.2014.11.025

33) Machado, A. (2021, July 7) Empresas devem investir mais 4,9% em 2021 depois de queda de 13,6% em 2020. Jornal de Negócios. [online]. https://www.jornaldenegocios.pt/empresas/detalhe/empresas-devem-investir-mais-49-em-2021-depois-de-queda-de-136-em-2020 (Accessed 13 July 2022)

34) Mamede, R., Pereira, M., and Simões, A. (2020) Portugal: Uma análise rápida do impacto da COVID-19 na economia e no mercado de trabalho. International Labour Organization. [online]. https://www.ilo.org/wcmsp5/groups/public/---europe/---ro-geneva/---ilo-lisbon/documents/publication/wcms_754606.pdf (Accessed 13 July 2022)

35) Manteu, C. (2021, November) ‘O impacto de curto prazo da pandemia COVID-19 nas empresas portuguesas’. Paper presented at the GEE/GPEARI Seminar. 12 November 2021. Lisbon, Portugal. [online]. https://www.gpeari.gov.pt/documents/35086/147420/2021-11.12-nov-O+Impacto+de+curto+prazo+da+pandemia.pdf/3b358ea7-35f3-8ed1-1c95-33451767eb1a?t=1636981167939 (Accessed 13 July 2022)

36) Mingatos, A.J.M. (2021) O Impacto da Pandemia Covid-19 na Economia e nos Mercados Financeiros. Uma Abordagem Quantitativa às Bolsas de Valores de Portugal e Espanha. Unpublished Master’s thesis. ISCAP-UP, Porto, Portugal.

37) Mota, A.G, Inácio, P.L., Barroso, C.D., Ferreira, M.A., Nunes, J.P. and Oliveira, L. (2020) Finanças da Empresa, Teoria e Prática, 6th ed., [Company Finance, Theory and Practice], Edições Sílabo, Lisbon.

38) Nikolaos, Z., Christos, K., George, T. and Efstratios, L. (2020) ‘Financial analysis of major retail chains within a turbulent economic environment’, Studies in Business and Economics, Vol. 15 No.3, pp. 208-222. https://doi.org/10.2478/sbe-2020-0054

39) Nissim, D. and Penman, S.H. (2003) ‘Financial statement analysis of leverage and how it informs about profitability and price-to-book ratios’, Review of Accounting Studies, Vol. 8, pp. 531–560.

40) Papadeas, P. and Sykianakis, N. (2017) Analysis and Investigation of Financial Statements, Papadea Publications, Athens.

41) Pié, L., Bonillo, I., Barceló, J. and Fabregat-Aibar, L. (2019) ‘Analysis of some economic-financial ratios to analyse the financial crisis in five-star hotels in Barcelona and Madrid’, Intangible Capital, Vol. 15 No. 2, pp. 99-113. https://doi.org/10.3926/ic.1361

42) Pinho, C.S., and Tavares, S. (2012) Análise Financeira e Mercados, 2nd ed., [Financial Analysis and Markets], Áreas Editora, SA., Lisbon.

43) Pordata. (2021). Valor acrescentado bruto das empresas: total e por dimensão. [online]. https://www.pordata.pt/Portugal/Valor+acrescentado+bruto+das+empresas+total+e+por+dimens%C3%A3o-2916 (Accessed 5 July 2022)

44) Reeves, M., and Whitaker, K. (2020, July) A Guide to Building a More Resilient Business, Harvard Business Review. [online]. https://hbr.org/2020/07/a-guide-to-building-a-more-resilient-business (Accessed 10 July 2022)

45) Rinaldo, N.E. and Endri, E. (2020) ‘Analysis of financial performance of plantation sub-sector companies listed on the Indonesia stock exchange for the 2014-2019 period’, International Journal of Innovative Science and Research Technology, Vol. 5 No.4, pp. 530-537.

46) Sakinç S.Ö. and Bilgener E. (2021) ‘The financial status of community pharmacies: Çorum province’, Turkish Journal of Pharmaceutical Sciences, Vol. 18 No.6, pp. 695-701. https://doi.org/10.4274/tjps.galenos.2021.63004

47) Santos, A.M.S. (2020) Diagnóstico Económico Financeiro de uma Empresa da Zona Centro. Unpublished Master’s thesis. ISCAC, Coimbra, Portugal.

48) Savills. (2020). Annual Report and Accounts 2020. [online]. https://ir.savills.com/~/media/Files/S/Savills-IR-V3/result-centre/2020/savills-plc-ar20.pdf (Accessed 13 July 2022)

49) Shahnia, C. and Endri, E. (2020) ‘Dupont analysis for the financial performance of trading, service and investment companies in Indonesia’, International Journal of Innovative Science and Research Technology, Vol. 5 No.4, pp. 193-211.

50) Silva, J.M.F.P. (2022) Essays on International Economics: External Balances Cyclical Adjustment and Cross-Border Financial Linkages. Unpublished PhD thesis. Lisbon School of Economics and Management, Lisbon, Portugal.

51) Tampakoudis, I., Nerantzidis, M., Soubeniotis, D. and Soutsas, A. (2018) ‘The effect of corporate governance mechanisms on European mergers and acquisitions’, Corporate Governance, Vol. 18 No.5, pp. 965-986. https://doi.org/10.1108/CG-05-2018-0166

52) Wang, G., Ma, J. and Yang, S. (2014) ‘An improved boosting based on feature selection for corporate bankruptcy prediction’, Expert Systems with Applications, Vol. 41 No.5, pp. 2353-2361. https://doi.org/10.1016/j.eswa.2013.09.033

53) Wiersinga, W.J., Rhodes, A., Cheng, A.C., Peacock, S.J. and Prescott, H.C. (2020) ‘Pathophysiology, transmission, diagnosis, and treatment of coronavirus disease 2019 (COVID-19): a review’, JAMA, Vol. 324 No.8, pp. 782–793. https://doi.org/10.1001/jama.2020.12839

54) Zemcik, P., and Araujo, B. (2020) Europe Economic Outlook: Global Recession. Moody’s Analytics. [online]. https://www.moodysanalytics.com/-/media/presentation/2020/europe-economic-outlook.pdf (Accessed 13 July 2022)

55) Zhang, Y. and Ma, Z.F. (2020) ‘Impact of the COVID-19 pandemic on mental health and quality of life among local residents in Liaoning province, China: a cross-sectional study’, International Journal of Environmental Research and Public Health, Vol. 17 No.7, 2381. https://doi.org/10.3390/ijerph17072381