Effects of the Pandemic on the Financial Performance of Listed Readymade Garment Firms in Bangladesh

Abstract

This study examined how the COVID-19 pandemic impacted the financial performance of listed firms in the readymade garment (RMG) industry in Bangladesh. Out of 56 RMG companies listed in the Bangladesh Stock Exchange, 33 firms whose complete financial data from 2016-2021 was publicly available were selected as the sample. Through the use of descriptive, correlation, and regression analysis, the study explored the sector's financial well-being both before and during the pandemic, including the relationship between the pandemic and financial metrics, the extent of its impact, and other factors that influenced financial performance. The findings revealed a significant negative impact on RMG profitability indicators such as Return on Assets (–.032, p < 0.01) and Return on Equity (–.067, p < 0.05). Factors such as firm size, debt ratio, growth rate, and accounts receivable turnover were also identified as significant influencers of financial performance during the pandemic period. These findings underscored the pandemic-related challenges that RMG companies in Bangladesh faced, and emphasize the importance of proactive strategies for risk mitigation. They also highlight practical implications for strategic financial management and resilience-building measures within the sector.