Does the Pandemic Matter? Diagnosing the Immediate Effects of the Covid-19 Pandemic on the Financial Security of Small Enterprises in Poland

Abstract

The Covid-19 pandemic broke out unexpectedly, and it is difficult to anticipate its future effects. As a result of the lockdowns, many enterprises were forced to curtail their business as early as in the first months of the pandemic. In view of such unprecedented phenomena, a question arises about possible effects of the pandemic on the financial standing of enterprises. The authors of this paper aimed to assess the immediate effects of the Covid-19 pandemic on the financial security of small enterprises in Poland, since the financial security is seen as an important factor influencing organizational resilience. This article applies the desk research and comparative analysis methods, which were conduct based on statistic office data. The studied enterprises were analysed in terms of changes in their liquidity ratios, sales profitability ratios as well as their revenue and profit levels – the results have shown a considerable diversity across sectors. Based on the assessment of changes in the indicators, the analysed sectors were categorised as: resistant sectors, hardly affected sectors, moderately affected sectors, severely affected sectors. The analysis of the selected indicators of financial security has shown that the financial result as well profitability levels were the indicators that deteriorated in the greatest number of sectors. Surprisingly, financial liquidity remained the most stable indicator. The research results can be helpful in proper channelling aid to enterprises to recover from crisis, since in first month of the pandemic most of financial support was not diversified