An Empirical Investigation of Financial Health and Financial Performance of Logistic Companies in the United Kingdom. A Critical Analysis Pre and Post Covid-19 Era
1Chandra Shekar Goud Burugu, 2Ayodeji Bamidele Owoeye
1,2Royal Agricultural University, Stroud Rd, Cirencester, GL7 6JS
https://doi.org/10.47191/jefms/v7-i2-24ABSTRACT:
After the pandemic, things are very different from how they were before the COVID-19 outbreak. Companies that had been performing well before the epidemic also saw their performance suffer during the COVID-19 era, especially those in the transportation industry due to the lockdown. The authors behind this paper hopes to learn more about and gain a better understanding of organizations by delving into their histories, structures, goals, challenges, solutions, and foci. To address and investigate the financial performance of logistic companies, the paper utilized a quantitative methodology. Annual audited financial statement of three logistic companies from 2013 to 2022. These include FeDex, DHL and XPO. The financial health of the selected companies is evaluated with the aforementioned criteria. While these businesses show stability, the analysis suggests that the market in which they operate is highly volatile. Increases in freight costs, tax increases, inflation, and other macroeconomic factors all contribute to this uncertainty, but well-planned improvements and emergency events also play a role. The research looked at the goals so that the audience could rest assured that the analysis was thorough and considered every angle of the organization. It's generally agreed that a company's success is measured by more than its bottom line. This research provides a thorough evaluation to aid business owners in identifying the features that set apart firms in terms of their potential for growth.
KEYWORDS:
Financial Health, Financial Performance, Logistic Market, Covid-19 Pandemic, Macroeconomy
REFERENCES:
1) Abeyratne, S. A., & Monfared, R. P. (2016), Blockchain ready manufacturing supply chain using distributed ledger. International Journal of Research in Engineering and Technology, 5(9), 1-10.
2) Arsyad, Muhammad & Haeruddin, Sitti & Muslim, Muslim. (2021). The effect of activity ratios, liquidity, and profitability on the dividend payout ratio. Indonesia Accounting Journal. 3. 36. 10.32400/iaj.30119.
3) Alkhyeli, S., Abdulla, F., Alshehhi, A., Aldhaheri, N., Alhosani, M., Alsereidi, A., Al Breiki, M. and Nobanee, H., 2021. Financial Analysis and Performance Evaluation of Pfizer. Available at SSRN 3896385.researchgate.net
4) Budianto, Eka Wahyu Hestya & dewi, Nindi. (2023). Mapping Research Topics on the Net Interest Margin (NIM) Ratio in Sharia and Conventional Banking: VOSviewer Bibliometric Study and Literature Review. 10.5281/zenodo.10254156.
5) Bowersox, D. J., Closs, D. J., & Cooper, M. B.(2002). Supply chain logistics management (Vol. 2). New York, NY: McGraw-Hill.
6) Christopher, M. (2016). Logistics & supply chain management. Pearson UK
7) De Vos, J. (2020). The effect of COVID-19 and subsequent social distancing on travel behavior. Transportation Research Interdisciplinary Perspectives, 5, 100121.
8) Devi, Sunitha & Warasniasih, Sindy & Masdiantini, Putu. (2020). The Impact of COVID-19 Pandemic on the Financial Performance of Firms on the Indonesia Stock Exchange. Journal of Economics, Business, & Accountancy Ventura. 23. 10.14414/jebav.v23i2.2313.
9) DP Sari, SD Nabella, AH Fadlilah (2022) The effect of Profitability, Liquidity, Leverage and Activity Ratios on Dividend Policy in Manufacturing Companies in the Food and Beverage Industry Sector Listed on the Indonesia Stock Exchange in the 2016-2020, Jurnal Mantik, (2022), https://iocscience.org/ejournal/index.php/mantik/article/view/2494/2036
10) DHL. (2020). Technology | DHL Supply Chain |. DHL. https://www.dhl.com/global-en/home/our-divisions/supply-chain/sectors-overview/technology.html
11) DHL. (2023). Vision and Mission - DHL Parcel -. DHL. https://www.dhl.com/pl-en/parcel/about-dhl-parcel/mission-vision.html
12) Endri, E., Sari, A.K., Budiasih, Y., Yuliantini, T. and Kasmir, K., 2020. Determinants of profit growth in food and beverage companies in Indonesia. Journal of Asian Finance, Economics and Business, 7(12), pp.739-748.academia.edu Freight Transport Association. (2021). Logistics Report 2021. Freight Transport Association. Retrieved from https://logistics.org.uk/
13) FedEx. (2020, September 21). The Blueprint for What’s Next. FedEx Newsroom; FedEx Newsroom. https://newsroom.fedex.com/newsroom/global/the-blueprint-for-whats-next
14) Firano, Zakaria & Salawa, Doughmi. (2020). Hierarchical financing and reality of the financial structure of Moroccan listed companies. Journal of Modelling in Management. ahead-of-print. 10.1108/JM2-12-2019-0287.
15) GÜLEÇ, Ömer & Bektaş, Tucan. (2019). Cash Flow Ratio Analysis: The Case of Turkey. 247-262.
16) Gripsrud, G., Olsson, U. H., & Silkoset, R.(2020). The Brexit effects: Explorative study of short-term impacts oncross-border logistics and trade from a business perspective. IndustrialMarketing Management, 84, 330-342.
17) Gupta, S., & Lei, Y. (2019). A literature review of the UK logistics and transport service sector. Benchmarking: An International Journal.
18) Gómez, L. (2023). Supply chains are more digital than you think. Europenews.xpo.com; XPO inc. https://europenews.xpo.com/en/2945/supply-chains-are-more-digital-than-you-think/
19) Husain, T. & Sunardi, N., 2020. Firm's Value Prediction Based on Profitability Ratios and Dividend Policy. Finance & Economics Review.riiopenjournals.com Husna, A. and Satria, I., 2019. Effects of return on asset, debt to asset ratio, current ratio, firm size, and dividend payout ratio on firm value. International Journal of Economics and Financial Issues, 9(5), pp.50-54.academia.edu
20) Hirdinis, M., 2019. Capital structure and firm size on firm value moderated by profitability, International Journal of Economics and Business Administration Volume VII, Issue 1, 2019, pp. 174-191
21) Ivanov, D. (2018). Industry 4.0 and supply chain risk management: a conceptual framework for managing supply chain disruptionsin a digital transformation era. Supply Chain Forum: An International Journal,19(1), 67-77.
22) Jihadi, M., Vilantika, E., Hashemi, S.M., Arifin, Z., Bachtiar, Y., & Sholichah, F. (2021). The Effect of Liquidity, Leverage, and Profitability on Firm Value: Empirical Evidence from Indonesia. Journal of Asian Finance, Economics and Business, 8, 423-431
23) Krulicky, T. and Horak, J. (2021) 'BUSINESS PERFORMANCE AND FINANCIAL HEALTH ASSESSMENT THROUGH ARTIFICIAL INTELLIGENCE', Economic and Managerial Spectrum, 15(2), 38+, available: https://link.gale.com/apps/doc/A690305226/AONE?u=anon~f24bfb87&sid=googleScholar&xid=c99e1753 [accessed 03 Jan 2024].
24) Katarina Valaskova & Tomas Kliestik & Dominika Gajdosikova, 2021. "Distinctive determinants of financial indebtedness: evidence from Slovak and Czech enterprises," Equilibrium. Quarterly Journal of Economics and Economic Policy, Institute of Economic Research, vol. 16(3), pages 639-659, September.
25) Khan, K.I.; Qadeer, F.; Mata, M.N.; Chavaglia Neto, J.; Sabir, Q.u.A.; Martins, J.N.; Filipe, J.A. Core Predictors of Debt Specialization: A New Insight to Optimal Capital Structure. Mathematics 2021, 9, 975. https://doi.org/10.3390/math9090975
26) Mangesti Rahayu, S. (2019), "Mediation effects financial performance toward influences of corporate growth and assets utilization", International Journal of Productivity and Performance Management, Vol. 68 No. 5, pp. 981-996. https://doi.org/10.1108/IJPPM-05-2018-0199
27) Mangan, J., Lalwani, C., & Lalwani, C. L. (2020). Global logistics and supply chain management. John Wiley & Sons
28) Meyer, G., Ruppert, T., & Mager, B. (2020). The internet of things in the logistics sector: future trends and challenges towards a smart logistics. Procedia CIRP, 88, 437-442.
29) Nguyen, H.T. X (2022), The effect of COVID-19 pandemic on financial performance of firms: empirical evidence from Vietnamese logistics enterprises, Journal of Asian Finance Economics and Business ; 9(2):177-183, 2022.
30) Osazefua I. J., (2020). Managers' financial practices and financial sustainability of Nigerian manufacturing companies: Which ratios matter most?. Cogent Economics & Finance.tandfonline.com
31) Olayinka, A.A., 2022. Financial statement analysis as a tool for investment decisions and assessment of companies’ performance. International Journal of Financial, Accounting, and Management, 4(1), pp.49-66.goodwoodpub.com
32) Owoeye, A.B (2023), The Integration of Artificial Intelligence and Blockchain in the Banking Industry: A Critical Practice Based Evaluation of the Present Applications, Adoption, and Future Issues. Central European Management Journal (Scopus Index). http://journals.kozminski.cem-j.org/index.php/pl_cemj/article/view/615/546
33) Owoeye, A.B (2023), Accounting Figures and Financial Performance of Listed Non-Financial Businesses on the Nigerian Stock Exchange. Central European Management Journal (Scopus Index) https://journals.kozminski.cem-j.org/index.php/pl_cemj/article/view/843/698
34) Owoeye, A.B (2023), Consumption, Housing Market and Demand for Mortgage Finance: Some Crucial Theoretical Discussions towards an Appropriate Model for an Emerging Economy, JOURNAL OF ECONOMICS, FINANCE AND MANAGEMENT STUDIES, Volume 06 Issue 09 (Sept 2023). Impact Factor 7.144, https://ijefm.co.in/v6i9/Doc/52.pdf
35) Owoeye, A.B (2023), Environmental Management Accounting and Stakeholders Perspective: A Theoretical Perspective, International Journal for Multidisciplinary Research (IJFMR), IJFMR Volume 5, Issue 6, November-December 2023,https://www.ijfmr.com/papers/2023/6/9268.pdf
36) Owoeye, A.B (2023), Environmental Management Accounting and Stakeholders Perspective: A Theoretical Perspective, International Journal for Multidisciplinary Research (IJFMR), IJFMR Volume 5, Issue 6, November-December 2023,https://www.ijfmr.com/papers/2023/6/9268.pdf
37) Palepu, K., Healy, P., & Peek, E. (2010). Business Analysis and Valuation: IFRS edition. Cengage Learning EMEA.
38) Patin, Jeanne-Claire & Rahman, Matiur & Mustafa, Muhammad. (2020). Impact of Total Asset Turnover Ratios on Equity Returns: Dynamic Panel Data Analyses. Journal of Accounting, Business and Management (JABM). 27. 19. 10.31966/jabminternational.v27i1.559.
39) Phuong, N. T. T., Hung, D. N., Van, V. T. T., & Xuan, N. T. (2020). Effect of Debt Structure on Earnings Quality of Energy Businesses in Vietnam. International Journal of Energy Economics and Policy, 10(3), 396–401. Retrieved from https://www.econjournals.com/index.php/ijeep/article/view/9110
40) Sunardi, Nardi & Husain, T. & Kadim, A.. (2020). Determinants of Debt Policy and Company's Performance. International Journal of Economics and Business Administration. VIII. 204-213. 10.35808/ijeba/580.
41) Tucker, A. (2020). Global e-commerce and logistics2020. Ti-insight. Retrieved from https://www.ti-insight.com/
42) Russo, I., Marsilio, M., Cappelli, L., & D'Andrea, A. (2020). Artificial intelligence in logistics. An ambidexterity perspective. International Journal of Logistics Research and Applications,23(2), 183-202.
43) XPO. (2022b). XPO Releases Preliminary Results for Third Quarter 2022 and Long-Term Targets | XPO Inc. XPO Inc. https://investors.xpo.com/news-releases/news-release-details/xpo-releases-preliminary-results-third-quarter-2022-and-long