IMPACT OF THE COVID-19 PANDEMIC ON THE KEY FINANCIAL INDICATORS OF SMALL AND MEDIUM-SIZED ENTERPRISES IN THE TEXTILE, CLOTHING AND SHOE MANUFACTURING INDUSTRY IN BULGARIA

Abstract

The COVID-19 pandemic that has occurred at global level at the end of 2019 caused unprecedented health and economic crisis. The pandemic put the enterprises from different sectors and industries of the Bulgarian economy to test. For the purposes of restricting the spread of COVID-19, on the 13th of March 2020 the National Assembly of the Republic of Bulgaria declared state of emergency, which continued until the 13th of May 2020. Then individual anti-epidemic measures remained valid in the country. However, during the autumn of 2020 and during the spring and autumn of 2021 the number of new cases increased and therefore some additional measures and restrictions were introduced for the business and the population of the country.
The measures undertaken by the national government for restricting and overcoming the consequences of the pandemic and for getting through the resulting health, economic and social crises had direct impact on the business of the enterprises and made them change their priorities. For the time being, the energy crisis and the increase of price of electricity, gas and a number of other goods also have direct impact on the enterprises’ business and its effectiveness.
Under the conditions of the corona crisis and the partial closure of the country’s economy, the revenue of many small and medium-sized enterprises decreased, and sometimes such decrease is considerable. At the same time, there are enterprises whose revenue records increase. This is due to the fact that such enterprises managed to adapt to the new conditions determined by the COVID-19 pandemic and to carry out their business successfully. Management decisions for the optimization of the mix structure of offered products, goods and services and its relevance to the market demand under the crisis pandemic conditions play crucial role to this effect.
The decrease of the enterprises’ revenue in the context of the corona crisis, all other things being equal, had direct impact on their financial performance and therefore on their margin. It’s worth noting the fact that under the conditions of crisis, enterprises’ expenses increased. It’s about the additional expenses incurred for staff tests as well as other corona crisis-related expenses.
The object of this publication refers to the number of employees, revenue, profit and cost-effectiveness of leading small and medium-sized enterprises in the Textile sector, Textile, Clothing and Shoe Manufacturing industry of the Bulgarian economy. The subject matter of the study covers some key absolute and relative indicators for analysis of staff, revenue, profit and cost-effectiveness of leading small and medium-sized enterprises in this industry.
It contains comparative analysis of the above indicators for 2020 in comparison to 2019 of leading small and medium-sized enterprises pursuing activity in the Textile, Clothing and Shoe Manufacturing industry in Bulgaria.
It is aimed at determining the impact of the COVID-19 pandemic crises on the key performance indicators of the business of small and medium-sized enterprises in this sector of the Bulgarian economy. On the basis of the analysis results, one can define and make decisions and apply relevant measures for improvement of the financial indicators that characterise the enterprises’ business and its effectiveness