Financial resilience and adaptation: Analyzing the impact of the COVID-19 pandemic on businesses rated successful

Abstract

AbstractThe aim of our research is to fill the research gap on how successful businesses have been affected by the challenges posed by COVID-19 regarding the resilience and adaptability of firms. Since 2016, the Budapest Stock Exchange (BSE), with the collaboration of EY, selects a number of unlisted companies (BSE50) per year that have Hungarian roots and are considered successful based on their operations and ability to increase sales. We examined the impact of COVID-19 on profitability, liquidity, indebtedness and change in turnover or EBITDA based on four years (2018–2021) of financial data from 252 non-financial, unlisted companies. In addition to the descriptive statistics, a two-sample asymptotic z-test was used to compare the periods before and during COVID-19. We divided the BSE50 companies into Dynamics and Laggards based on the change in turnover between 2019 and 2020. The Dynamics of the pandemic have emerged from the challenging period of COVID-19 as real champions, taking advantage of their low level of indebtedness by making efficient use of loan possibilities. Even the Laggards were able to rebalance and consolidate their financial position by the second year of the pandemic. Our study is novel because we used data on Hungarian, non-financial, unlisted companies with successful management to examine the impact of COVID-19 on hard-hit firms as well as on firms in the winning branch.