IDEAS home Printed from https://ideas.repec.org/a/ist/imeder/v0y2022i66p95-112.html
   My bibliography  Save this article

Effects of COVID-19 Pandemic on Textile, Leather and Clothing Companies and Their Financial Reports: a Research in BIST

Author

Listed:
  • Tuba Ergun

    (Istanbul Bilgi University, Graduate Programs Institute, Accounting and Auditing Master's Program with Thesis, Istanbul, Turkey)

  • Derya Uçoglu

    (Istanbul Bilgi University, Faculty of Business Administration, Department of Business Administration, Istanbul, Turkey)

Abstract

The novel coronavirus disease 2019 (COVID-19) is a health concern that has rapidly turned into a global economic crisis. This study aims to determine the effects of the COVID-19 on textile, leather, and clothing companies and their financial reports. For this purpose, horizontal, ratio, and content analyses were carried out using the financial statements and footnotes of 21 companies listed in the BIST that fall under the aforementioned sectors. The results show that most of the companies have increased their liabilities during the pandemic and thus, considering such uncertainties in 2020, possess more liquidity compared to the previous year. Revenues of retailing ready-made clothing, shoes, and bags were found to decrease, while those of clothing raw materials such as yarn, dyed fabric, and lining indicated an increase. Due to the pandemic, there has been a decrease in the revenues of companies producing or retailing ready-made clothing, shoes, and bags. In contrast, companies providing raw materials such as yarn, dyed fabric, and lining indicated an increase. Findings show reduced profitability in half of the examined companies due to decreased revenues, increased financial expenses, and foreign exchange losses. The companies reviewed their cash management strategies and enacted necessary measures. Therefore, except for two businesses, no other companies generated negative net cash flows in 2020. In summary, publicly traded textile, leather, and clothing companies were managed well during the pandemic. Apart from a few enterprises, no significant liquidity and profitability problems were encountered. Based on the analysis of the notes to the financial statements, several companies did not disclose any explanations regarding COVID-19, while others only reported limited disclosures.

Suggested Citation

  • Tuba Ergun & Derya Uçoglu, 2022. "Effects of COVID-19 Pandemic on Textile, Leather and Clothing Companies and Their Financial Reports: a Research in BIST," Muhasebe Enstitusu Dergisi - Journal of Accounting Institute, Istanbul University Business School, vol. 0(66), pages 95-112, January.
    • Handle: RePEc:ist:imeder:v:0:y:2022:i:66:p:95-112
    DOI: 10.26650/MED.998932
    as

    Download full text from publisher

    File URL: https://cdn.istanbul.edu.tr/file/JTA6CLJ8T5/B201FEE7B7024DABAA7E7A7C29DE0E92
    Download Restriction: no
    File URL: https://iupress.istanbul.edu.tr/en/journal/jai/article/covid-19-pandemisinin-tekstil-deri-ve-giyim-esyasi-sektorlerinde-faaliyet-gosteren-firmalara-ve-finansal-raporlarina-etkileri-bistte-bir-arastirma
    Download Restriction: no
    File URL: https://libkey.io/10.26650/MED.998932?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Meghana Mishra & Pravudatta Mishra, 2021. "Prioritizing Financial Crises Due to COVID-19: An Economic Safety and Sustainability Approach in India," International Journal of System Dynamics Applications (IJSDA), IGI Global, vol. 10(1), pages 1-11, January.
    2. Li Cui & Pamela Kent & Sujin Kim & Shan Li, 2021. "Accounting conservatism and firm performance during the COVID‐19 pandemic," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 61(4), pages 5543-5579, December.
    3. Kanno, Masayasu, 2021. "Assessing the impact of COVID-19 on major industries in Japan: A dynamic conditional correlation approach," Research in International Business and Finance, Elsevier, vol. 58(C).
    4. Meghana Mishra & Pravudatta Mishra, 2021. "Prioritizing Financial Crises Due to COVID-19: An Economic Safety and Sustainability Approach in India," International Journal of System Dynamics Applications (IJSDA), IGI Global, vol. 10(1), pages 65-75, January.
    5. Kiranpreet Kaur, 2021. "The Early Impact of COVID-19 on Textile Industry: An Empirical Analysis," Management and Labour Studies, XLRI Jamshedpur, School of Business Management & Human Resources, vol. 46(3), pages 235-247, August.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Katarzyna Boratyńska, 2021. "A New Approach for Risk of Corporate Bankruptcy Assessment during the COVID-19 Pandemic," JRFM, MDPI, vol. 14(12), pages 1-14, December.
    2. Suthasinee Suwannapak & Surachai Chancharat, 2022. "Stock Market Volatility Response to COVID-19: Evidence from Thailand," JRFM, MDPI, vol. 15(12), pages 1-9, December.
    3. Hasan, Md. Tanvir, 2022. "The sum of all SCARES COVID-19 sentiment and asset return," The Quarterly Review of Economics and Finance, Elsevier, vol. 86(C), pages 332-346.
    4. Ren, Zhaomin & Zhang, Xuan & Zhang, Zhekai, 2021. "New evidence on COVID-19 and firm performance," Economic Analysis and Policy, Elsevier, vol. 72(C), pages 213-225.
    5. D’Augusta, Carlo & Grossetti, Francesco, 2023. "How did Covid-19 affect investors’ interpretation of earnings news? The role of accounting conservatism," Finance Research Letters, Elsevier, vol. 52(C).
    6. Pawel Bilinski, 2023. "Analyst Research Activity During the COVID‐19 Pandemic," Abacus, Accounting Foundation, University of Sydney, vol. 59(4), pages 1041-1073, December.
    7. Kanno, Masayasu, 2021. "Risk contagion of COVID-19 in Japanese firms: A network approach," Research in International Business and Finance, Elsevier, vol. 58(C).
    8. Hossain, Ashrafee T. & Masum, Abdullah-Al & Xu, Jian, 2023. "COVID-19, a blessing in disguise for the Tech sector: Evidence from stock price crash risk," Research in International Business and Finance, Elsevier, vol. 65(C).
    9. Nyanine Chuele Fonou Dombeu & Bomi Cyril Nomlala, 2023. "Earnings Quality Research: Trend, Recent Evidence and Future Direction," International Review of Management and Marketing, Econjournals, vol. 13(5), pages 1-8, September.
    10. Joanna Lizińska & Leszek Czapiewski, 2023. "Earnings Management amid the COVID-19 Financial Crisis: The Experience of Poland," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 1, pages 93-112.
    11. ARAVAMUDHAN Varadaraj & SAI MOHANRAJ Prasanna & SENGODAN Ananth, 2022. "Implications Of Covid-19 On Textiles Industry In India - Discovering Issues And Challenges On Demand And Supply Sides," Eastern European Journal for Regional Studies (EEJRS), Center for Studies in European Integration (CSEI), Academy of Economic Studies of Moldova (ASEM), vol. 8(2), pages 18-29, December.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ist:imeder:v:0:y:2022:i:66:p:95-112. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ertugrul YASAR (email available below). General contact details of provider: https://edirc.repec.org/data/isisttr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.