COVID-19 Pandemic's Effect on Performance and Acceleration of Performance Recovery: A Study on Manufacturing Industry in Bangladesh

Golam Shahria

Abstract


Research aims: The primary aim of this study is to examine the effect of the COVID-19 pandemic during and after this pandemic on manufacturing sectors in Bangladesh. In the context mentioned above, some issues are then taken as the specific objectives.
Design/Methodology/Approach: The study was conducted on the manufacturing sectors listed under Dhaka Stock Exchange (DSE). The study's target population was 42 manufacturing companies out of 153 listed on Dhaka Stock Exchange (DSE). Four research variables were used to evaluate sample companies' financial performance and financial position. Documentary analysis, descriptive analysis, data normality test, and Wilcoxon Signed–Rank Test were employed to evaluate the hypotheses. The years of annual reports, 2018-2019 to 2020-2021, were utilized for the documentary analysis of sample companies' financial performance and financial position.
Research findings: The study's conclusions demonstrated that this pandemic significantly impacted Bangladeshi companies' financial performance (essentially ROA and ROE) at a 5% significance level compared to before the pandemic. In addition, the recovery growth rate of financial performance of sample companies increased optimistically, and the growth of liquidity position of manufacturing companies was also seen in an advantageous position after the COVID-19 pandemic compared to during the COVID-19 pandemic based on Wilcoxon statistical test tool.
Theoretical contribution/Originality: The findings of this study can be used as a source of relevant data by investors or future investors for their investment decisions shortly. The findings of this study will also assist the government in determining or preparing the appropriate tax incentive scheme for the impacted industries and whether the correct sector would profit from the tax incentive scheme.
Practitioner/Policy implication: Considering that the COVID-19 pandemic has significantly impacted the import process of raw materials for production from China in specific and from other countries generally, the study advised the government of Bangladesh to boost its logistic and financial support for the local facility of raw materials.
Research limitation/Implication: More extensive research is projected to be conducted on the recovery growth rate of financial performance in Bangladesh's sub-sector manufacturing industries.


Keywords


COVID-19 pandemic; Leverage ratio; Liquidate ratio; Profitability ratio

Full Text:

PDF

References


Abbas, D. S. (2017). Pengaruh Current Ratio, Account Receivable Turnover, Inventory Turnover, Total Asset Turnover dan Debt to Equity terhadap Return on Asset (Pada Perusahaan manufaktur sub sektorotomotif dan komponen yang Terdaftar di Bursa Efek Indonesia Pada Tahun 2011-2014). Competitive JurnalAkuntansi Dan Keuangan, 2(1), 55-72. https://doi.org/10.31000/competitive.v2i1.465

Achim, M. V., Safta, I. L., Văidean, V. L., Mureșan, G. M., & Borlea, N. S. (2021). The impact of covid-19 on financial management: evidence from Romania. Economic Research-EkonomskaIstraživanja, 35(1), 1807–1832. https://doi.org/10.1080/1331677x.2021.1922090

Ahmed, A. S., & Duellman, S. (2007). Accounting conservatism and board of director characteristics: An empirical analysis. Journal of Accounting and Economics, 43(2–3), 411–437. https://doi.org/10.1016/j.jacceco.2007.01.005

Akindele, A. J. & Odusina, A. O. (2015). Working Capital Management and Firm Profitability: Evidence from Nigerian Quoted Companies. Research Journal of Finance and Accounting, 6(7), 148-153. Retrieved from https://www.iiste.org/Journals/index.php/RJFA/article/view/21604

Allad, I., & Maisuria, D. M. H. (2015). ‘Ratio Analysis’ an Accounting Technique of Analysis and Interpretation of Financial Statements. International Journal of Research in Humanities & Social Sciences, 3(2), 50-54.

Asian Development Bank (ADB). (2022). Asian Development Outlook (ADO) 2022. https://www.adb.org/what-we-do/economic-forecasts/april-2022/subregions#accordion-2-1.

Bartik, A. W., Bertrand, M., Cullen, Z., Glaeser, E. L., Luca, M., & Stanton, C. (2020). The impact of COVID-19 on small business outcomes and expectations. Proceedings of the National Academy of Sciences, 117(30), 17656–17666. https://doi.org/10.1073/pnas.2006991117

Bintang, F. M., Malikah, A., & Afifudin, A. (2019). Pengaruh opini audit tahun sebelumnya, debt default, rasio likuiditas, rasio leverage terhadap opini audit going concern. E_Jurnal Ilmiah Riset Akuntansi, 8(10), 98–115. Retrieved from http://riset.unisma.ac.id/index.php/jra/article/view/4387

Botchkarev, A., & Andru, P. (2011). A Return on Investment as a Metric for Evaluating Information Systems: Taxonomy and Application. Interdisciplinary Journal of Information, Knowledge, and Management, 6, 245–269. https://doi.org/10.28945/1535

Bromiley, P., & Rau, D. (2015). Operations management and the resource based view: Another view. Journal of Operations Management, 41(1), 95–106. https://doi.org/10.1016/j.jom.2015.11.003

Chariri, A. (2011). Financial reporting practice as a ritual: understanding accounting within institutional framework. Journal of Economics, Business, and Accountancy Ventura, 14(1), 89–106. https://doi.org/10.14414/jebav.v14i1.22

Chen, S., Wang, Y., & Zhao, Z. (2009). Regulatory Incentives for Earnings Management through Asset Impairment Reversals in China. Journal of Accounting, Auditing & Finance, 24(4), 589–620. https://doi.org/10.1177/0148558x0902400405

Choi, T. H., & Pae, J. (2011). Business Ethics and Financial Reporting Quality: Evidence from Korea. Journal of Business Ethics, 103(3), 403–427. https://doi.org/10.1007/s10551-011-0871-4

Devi, S., Warasniasih, N. M. S., & Masdiantini, P. R. (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(2), 226 – 242. https://doi.org/10.14414/jebav.v23i2.2313

Ferdous, M. Z., Islam, M. S., Sikder, M. T., Mosaddek, A., Zegarra-Valdivia, J. A., & Gozal, D. (2020). Knowledge, attitude, and practice regarding COVID-19 outbreak in Bangladesh: An online-based cross-sectional study. PloS one, 15(10), e0239254. https://doi.org/10.1371/journal.pone.0239254

Fraser, L. M., & Ormiston, A. (2016). Understanding Financial Statements, 11th Edition. Pearson.

Hadiwardoyo, W. (2020). Kerugian ekonomi nasional akibat pandemi Covid-19. Baskara Journal of Business & Enterpreneurship, 2(2), 83–92. Retrieved from https://jurnal.umj.ac.id/index.php/baskara/article/view/6207

Harahap, S. S. (2011). Analisis kritis atas laporan keuangan. Jakarta: PT Raja Grafindo Persada.

Holland, J. (1999). Financial Reporting, Private Disclosure and the Corporate Governance Role of Financial Institutions. Journal of Management & Governance, 3, 161–187. https://doi.org/10.1023/A:1009991609633

Innocent, E. C., Mary, O. I., & Matthew, O. M. (2013). Financial Ratio Analysis as a Determinant of Profitability in Nigerian Pharmaceutical Industry. International Journal of Business and Management, 8(8). https://doi.org/10.5539/ijbm.v8n8p107

Istiningrum, A. A. (2005). Perbandingan kinerja keuangan perusahaan jasa yang terdaftar di BEJ sebelum dan selama krisis moneter. Jurnal Pendidikan Akuntansi Indonesia, 4(1), 117–33. https://doi.org/10.21831/jpai.v4i1.1776

Jermias, J., & Yigit, F. (2019). Factors affecting leverage during a financial crisis: Evidence from Turkey. Borsa Istanbul Review, 19(2), 171–185. https://doi.org/10.1016/j.bir.2018.07.002

Karim, Md. R., Shetu, S. A., & Razia, S. (2021). COVID-19, liquidity and financial health: empirical evidence from South Asian economy. Asian Journal of Economics and Banking, 5(3), 307–323. https://doi.org/10.1108/ajeb-03-2021-0033

Lacey, N. J., & Chambers, D. R. (2010). Modern Corporate Finance: Theory & Practice, 6th edition. Hayden-McNeil Publishing.

Lalithchandraa B. N., & Rajendhiranb, D. N. (2021). Liquidity Ratio: An Important Financial Metrics. Turkish Journal of Computer and Mathematics Education (TURCOMAT), 12(2), 1113–1114. https://doi.org/10.17762/turcomat.v12i2.1129

Mendes, C. A., Rodrigues, L. L., & Esteban, L. P. (2012). Evidence of earnings management using accruals as a measure of accounting discretion. Tékhne, 10(1), 3–14. https://doi.org/10.1016/s1645-9911(12)70002-6

Ministry of Finance. (2020). Budget Speech, National Budget of Bangladesh 2019 -2020. Retrieved from https://mof.gov.bd/site/page/591b7120-945c-4b88-9bd5-3447963f6249.

Moudud-Ul-Huq, S., Akter, R., & Biswas, T. (2020). Impact of Financial Crisis on Credit Risk: Pre- and Post-financial Crises in an Emerging Economy. FIIB Business Review, 9(2), 118–132. https://doi.org/10.1177/2319714520923952

Omaliko, E. L., Amnim, A., Okeke, P. C., & Obiora, F. C. (2021). Impact of Covid-19 Pandemic on Liquidity and Profitability of Firms in Nigeria. International Journal of Academic Research in Business and Social Sciences, 11(3), 1331-1344. https://doi.org/10.6007/ijarbss/v11-i3/9229

Pfeiffer, L., Holub, L., Pithart, Z., & Hodula M. (2017). Leverage Ratio and its Impact on the Resilience of the Banking Sector and Efficiency of Macroprudential Policy. Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, 67(4), 277-299.

Poletti, P., Ajelli, D. M., & Merler, D. S. (2015). The Fifteenth Bellman Prize. Mathematical Biosciences.

Rhamadana, R. B. & Triyonowati (2016). Analisis rasio keuangan untuk menilain kinerja keuangan pada PT. H. M. Sampoerna Tbk. Jurnal Imu dan Riset Manajemen, 5(7), 1–18. Retrieved from http://jurnalmahasiswa.stiesia.ac.id/index.php/jirm/article/view/841

Riswan, R., & Kesuma, Y. F. (2014). Analisis Laporan Keuangan sebagai dasar dalam Penilaian Kinerja Keuangan PT. Budi Satria Wahana Motor. Jurnal Akuntansi Dan Keuangan, 5(1). https://doi.org/10.36448/jak.v5i1.449

Rofikoh, I. (2005). Pengaruh Krisis Moneter Terhadap Kinerja Perusahaan Publik di Bursa Efek Jakarta. Journal of Accounting and Investment, 2(2), 87-104. Retrieved from https://journal.umy.ac.id/index.php/ai/article/view/618

Sajiyah, I. (2016). Pengaruh current ratio, debt to equity ratio dan return on investment terhadap harga saham perusahaan food and baverages. Akademika, 14(1), 32–39. Retrieved from https://jurnal.stieimalang.ac.id/index.php/JAK/article/view/43

Samuels, S. (2014). The challenges of the leverage ratio. Journal of Risk Management in Financial Institutions, 7(3), 231-238. Retrieved from https://hstalks.com/article/3578/the-challenges-of-the-leverage-ratio/

Sari, D. I. (2020). Pengaruh Current Rasio Dan Debt to Equity Ratio Terhadap Harga Saham Perusahaan Otomotif. Jurnal Riset Akuntansi & Keuangan Dewantara, 3(1), 66–77. https://doi.org/10.26533/jad.v3i1.522

Sehaq, S. (2019). Analisis Profitabilitas PT. BRI Syariah Periode 2009-2018 (Dilihat dari Pengaruh Financing to Deposit Ratio dan Non Performing Financing Terhadap Return on Asset). EKSISBANK (Ekonomi Syariah dan Bisnis Perbankan), 3(2), 119-130. https://doi.org/10.37726/ee.v3i2.66

Shahriar, M. S., Islam, K. M. A., Zayed, N. M., Hasan, K. B. M. R., & Raisa, T. S. (2021). The Impact of COVID-19 on Bangladesh’s Economy: A Focus on Graduate Employability. The Journal of Asian Finance, Economics and Business, 8(3), 1395–1403. https://doi.org/10.13106/JAFEB.2021.VOL8.NO3.1395

Sharaf R. F., & Haddad, F. S. (2015). The Relationship between Working Capital Management and Profitability for Industrial Companies Listed in Amman Stock Exchange. Jordan Journal of Business Administration, 11(2), 5009-523. Retrieved from https://journals.ju.edu.jo/JJBA/article/view/9466

Shen, H., Fu, M., Pan, H., Yu, Z., & Chen, Y. (2020). The Impact of the COVID-19 Pandemic on Firm Performance. Emerging Markets Finance and Trade, 56(10), 2213–2230. https://doi.org/10.1080/1540496x.2020.1785863

Singh, N., & Kaur, A. (2021). The COVID‐19 pandemic: Narratives of informal women workers in Indian Punjab. Gender, Work & Organization, 29(2), 388–407. https://doi.org/10.1111/gwao.12766

Subramanyam, K. R. (2014). Financial statement analysis. McGraw Hill Education.

Tocco, B., Bailey, A., & Davidova, S. (2013). The Theoretical Framework and Methodology to Estimate the Farm Labour and Other Factor-Derived Demand and Output Supply Systems.

UNICEF Bangladesh. (2020). Tackling The Covid-19 Social and Economic Crisis in Bangladesh: Providing universal, lifecycle social security transfers to protect lives and bolster economic recovery. Retrieved from https://www.unicef.org/bangladesh/en/reports/tackling-covid-19-social-and-economic-crisis-bangladesh

Vo, T. A., Mazur, M., & Thai, A. (2022). The impact of COVID-19 economic crisis on the speed of adjustment toward target leverage ratio: An international analysis. Finance Research Letters, 45, 102157. https://doi.org/10.1016/j.frl.2021.102157




DOI: https://doi.org/10.18196/jai.v23i3.15542

Refbacks

  • There are currently no refbacks.


Bookmark and Share


Office:
Ruang Jurnal Fakultas Ekonomi dan Bisnis UMY
Gedung Ki Bagus Hadikusuma (E4) Lantai 2, Kampus Terpadu Universitas Muhammadiyah Yogyakarta,
Jalan Brawijaya (Lingkar Selatan), Tamantirto, Kasihan, Bantul, Daerah Istimewa Yogyakarta, Indonesia, 55183
Website: journal.umy.ac.id/index.php/ai - E-mail: jai@umy.ac.id

Journal of Accounting and Investment is licensed under Creative Commons Attribution Attribution-NonCommercial-NoDerivatives 4.0 International License

View My Stats