Results of Non-financial Corporations to 2020 Q4. Preliminary Year-end Data

16 Pages Posted: 9 Apr 2021 Last revised: 29 Apr 2021

Date Written: March 26, 2021

Abstract

The COVID-19 crisis has significantly impacted firms’ economic and financial performance. Thus, the Central Balance Sheet Data Office Quarterly Survey evidences that in 2020 the ordinary earnings and average profitability of the firms of this sample fell sharply. While profitability worsened across the board, in some sectors, such as industry, wholesale and retail trade and hospitality, and information and communication, the deterioration was particularly severe. Further, extraordinary earnings performed particularly negatively, resulting in a sharp drop in net profit. Financial positions have also been dented; the average debt and debt burden ratios both increased. In light of greater uncertainty, firms increased their liquidity buffers as a precautionary measure. The article contains a box that concludes that the increased financial pressure borne by some firms seems to bear a greater relation to the drop in ordinary earnings than to the rise in debt, which, overall, appears to have been moderate for the sample firms.

Keywords: activity, earnings, financial position, non-financial corporations, COVID-19

JEL Classification: L25, M21, M41

Suggested Citation

Menéndez Pujadas, Álvaro and Mulino Rios, Maristela, Results of Non-financial Corporations to 2020 Q4. Preliminary Year-end Data (March 26, 2021). Banco de Espana Article 10/21, Available at SSRN: https://ssrn.com/abstract=3821589

Álvaro Menéndez Pujadas (Contact Author)

Banco de España ( email )

Alcala 50
Madrid 28014
Spain

Maristela Mulino Rios

Banco de España ( email )

Alcala 50
Madrid 28014
Spain

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