Dynamics of the debt burden of non-financial enterprises in Bulgaria during the period 2016-2020

The purpose of the study is to assess the dynamics of the debt burden of non-financial enterprises in Bulgaria, emphasizing the impact of the coronavirus pandemic on companies from different sectors. The analysis in the article is based on data for the period 2016 – 2020, which were provided by National statistical institute. Both with the help of the coefficients based on information from the income statement and the balance sheet, as well as on the basis of the coefficients with the participation of the cash flow from operations, a high volatility of the capacity to bear debt is found. This indicates a high risk and a strong dependence on attracted financing for the refinancing of maturing liabilities. The study showed heterogeneous dynamics of indebtedness and the burden of debt in different sectors during the first year of the pandemic, which can be largely explained by the divergent impact of measures to limit the spread of the infection on the level of economic activity in individual sectors. In the majority of the studied sectors, a decrease in the capacity to bear debt is found in the first year of the pandemic. A negative indicator of the capacity of companies to bear the burden of debt is also the low profitability of the use of assets during the studied period. In most sectors, an increase in the traditional liquidity ratios was found, but a significant deterioration of the indicator Cash flow from operations/ Current liabilities in the first year of the pandemic. The pandemic has exacerbated the shortcomings of traditional liquidity ratios by increasing uncertainty about how salable inventories are and how collectable receivables of the companies are.