The Effects of the Covid-19 Epidemic on the Financial Failure of Businesses: An Investigation of the Businesses in the BIST Manufacturing Sector Using the Altman Z-Score Method

Abstract

The COVID-19 pandemic has adversely affected the economies of most countries around the world. Businesses traded on the stock exchange may face financial failure (bankruptcy risk) due to the economic problems caused by the restrictions created by the epidemic. In this study, it has been tried to determine how businesses in the Borsa Istanbul (BIST) Manufacturing Sector were affected by the COVID-19 outbreak. The aim of the study; Calculating the bankruptcy risk ratios of the enterprises in the ISE Manufacturing Sector with the Altman Z''-Score method, and interpreting the changes in these ratios as of two-year quarters by associating them with the COVID-19 outbreak. The sample of the study consisted of 175 enterprises in the BIST Manufacturing Sector. According to the results of the analysis obtained from the study, it was determined that COVID-19 did not affect some enterprises in the manufacturing sector, but negatively affected some enterprises and positively affected some enterprises. Therefore, after the analysis carried out within the scope of the study, it was concluded that the positive or negative effects of the COVID-19 epidemic varied on the basis of the sector, but did not have a distinctive effect according to the field of activity. Finally, the study was concluded by making suggestions for the limitations of the study and for those who will do research on similar issues in the future.