Financial statement analysis of logistics service providers: ways of enhancing performance

Abstract

Purpose – Despite the relevance of financial information relating to logistics service providers (LSPs), recent research has paid little attention to the financial analysis of LSPs. The aim of this paper is to examine the balance sheet structure of LSPs in order to find out if there are differences between single providers or defined LSP groups (clusters), respectively. Furthermore, the dependency of asset, capital and liquidity structures on LSPs specific characteristics is pointed out. Finally, we show which financial indicators positively influence profitability. Design/methodology/approach – A total of 150 quoted LSPs from all over the world, allocated to six different clusters depending on scope of service were examined. A detailed balance sheet analysis using contingency theory, complemented by a correlation analysis, provides information about the financial structure, similarities and differences within and in-between the LSP clusters. Findings – It was found that there are many differences regarding the financial structures of LSPs. The asset and liquidity structure of LSPs show significant differences, while the capital structure is mostly homogeneous. Profitability is achieved in various ways: Focusing on high net profit margin or asset turnover rates. Research limitations/implications – Only quoted LSPs are analyzed. With this broad research approach the authors point out the range of possibilities for financial statement analysis of LSPs and demonstrate the potential for future research. Practical implications – Financial analysis yields information for making strategic decisions including organic growth, outsourcing, mergers and acquisitions or cooperation between LSPs. Originality/value – This paper contributes to further performance examinations of LSPs by providing a profound financial statement analysis with potential benefits for logistics executives, analysts and researchers.