Corporate Financial Policy as a Factor of Corporate Sustainability and Health during COVID-19 Pandemic Period

Abstract

Research Question: This paper analyses whether a relationship exists between the financial policy of the companies, embodied in the structure of assets and liabilities, and their financial health during the COVID-19 pandemic. Motivation: The paper aims to consider the impact of changes in the value of individual items of the balance sheet of selected companies on the movement of profitability, liquidity, and market value of companies, as measures of the companies’ financial health. Idea: The core idea of this paper was to empirically evaluate the financial health of domestic companies, where the financial policy that the selected companies implemented was taken as a factor of financial health. The financial policy was viewed through the structure of assets and financing of the chosen companies, while financial resilience observation was based on indicators of profitability, liquidity, and market value of the companies. Data: Secondary data from the reference database (Index of the Belgrade Stock Exchange) during the period 2016-2020, which includes 30 companies from the real sector, serve as the relevant basis for the realization of the research within the adequately set area of the research. Tools will be used to study the relationship, i.e., connectivity of selected research variables based on regression analysis in the frame of parametric quantitative procedures. The financial policy was viewed through the structure of assets and financing of the chosen companies, based on their balance sheets, while financial resilience observation was based on indicators of profitability, liquidity, and market value of the companies, which were used as dependent variables in the research. Findings: The point that changes in a relatively small number of the balance sheet items of selected companies influenced the movement of the mentioned financial health indicators during the COVID-19 pandemic. Contribution: Presented research results are significant and representative for future corporate practice. The key contribution of this research is the identification of assets’ elements with a critical impact on companies’ financial health.

Author Biographies

Zenaida Šabotić, State University of Novi Pazar, Department of Economics Sciences, Serbia

Zenaida Šabotić is Assistant Professor of Finance at the Department of Economics Sciences at the State University of Novi Pazar, Republic of Serbia. She received her Ph.D. in 2014 from the Faculty of Economics, University of Niš. Her research interest includes finance and banking. She intensively deals with the problems of international finance, monetary finance, European integration, optimal currency area, with detailed statistical analysis and interpretation of current economic trends. She has published numerous papers in international and national journals and conference proceedings.

Ahmedin Lekpek, State University of Novi Pazar, Department of Economics Sciences, Serbia

Ahmedin Lekpek is Assistant Professor of Banking and Finance at the Department of Economics Sciences at the State University of Novi Pazar, Republic of Serbia. He received his Ph.D. in 2013 from the Faculty of Economics, University of Niš. His research interests include Islamic banking, conventional banking and corporate finance. He has published numerous papers in international and national journals, proceedings of international and national scientific conferences and a thematic collection of papers.

Published
2022-12-25
How to Cite
Šabotić, Z., & Lekpek, A. (2022). Corporate Financial Policy as a Factor of Corporate Sustainability and Health during COVID-19 Pandemic Period. Management:Journal Of Sustainable Business And Management Solutions In Emerging Economies, . doi:10.7595/management.fon.2022.0013
Section
Articles