Impact of the COVID-19 Pandemic on the Financial Statements of Portuguese Stock Index 20 Companies

Abstract

COVID-19 emerged and spread all over the world. Portugal was no exception. Rules and measures applied, regarding the impacts of the pandemic, have affected the economy and, naturally, the entities life. The main objective of this chapter is to investigate the standards and rules entities have to obey and orientations that they have to follow vis a vis COVID-19, and to understand how COVID-19 has impacted interim financial statements of the entities included in the selected sample. Then it seeks to measure entities financial health using financial ratios and Zmijewski model and to compare those entities in order to try to find any relation among financial health and the disclosures made about COVID-19. It verifies that, as a rule, entities have followed the necessary procedures and that COVID-19 has had an impact, specially over credit risk, revenues, and expenses, and that the financially healthier entity is a quite transparent one.