Financial Metrics Effect on Companies Performance During COVID­19

Financial metrics are important tools for managers and investors to assess performance of companies. At the start of 2020, a global pandemic COVID-19 broke out, resulting in bearish markets when mandatory lockdowns were announced. On the 16th of March the Dow Jones Industrial average dropped 13% and...

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Bibliographic Details
Main Authors: Hugo, Thoursie, Fageräng, Lucas
Format: Others
Language:English
Published: KTH, Skolan för teknikvetenskap (SCI) 2021
Subjects:
Online Access:http://urn.kb.se/resolve?urn=urn:nbn:se:kth:diva-298075
Description
Summary:Financial metrics are important tools for managers and investors to assess performance of companies. At the start of 2020, a global pandemic COVID-19 broke out, resulting in bearish markets when mandatory lockdowns were announced. On the 16th of March the Dow Jones Industrial average dropped 13% and the S&P500 north of 12%. The lockdowns all over the world have had massive impact on businesses with layoffs required to stay afloat together with closing of factories. This study aims to establish which, if any, economic metrics have given companies the edge during the pandemic. Through the use of Multiple Linear Regression, models were created for three sectors in the Swedish market, Healthcare, Industry and Consumers Discretionary. From the models there were four different variables found to have correlation to how well companies performed during the pandemic, with different combinations for each sector. These were current ratio for Healthcare and Industry, as well as D/E and ROE for Consumers Discretionary. The study also contains a qualitative study of the models and an evaluation. The evaluation and results did indicate that certain financial metrics had some type of correlation with the Net Income change of a company. Most important on the other hand was that other factors did probably influence the results of a company more than previously mentioned financial metrics.