AN UNCONVENTIONAL APPRACH TO EVALUATING THE FINANCIAL PERFORMANCE UNDER CRITICAL MACROECONOMIC DISTURBANCES: THE CASE OF PUBLIC TRANSPORT DURING THE COVID-19 PANDEMIC

Abstract

The period of Covid pandemic was one of the most restrictive times for the passenger transport sector. Due to the impact of anti-pandemic measures, the mobility of the population was limited, which was reflected in the decrease in sales and collapse of long-term financial indicators. Therefore, the period can be considered as the case of critical macroeconomic disturbances. The main purpose of this research is to identify the most relevant financial indicators that affect the transport enterprises performance and define new alternative way of grouping company financial indicators based on their mutual correlation. Therefore, this paper, using the tools of descriptive statistics and factor analysis, identifies the correlations of selected financial indicators that allow a better understanding of their interrelatedness and influence during extraordinary macroeconomic situations on the market. The data source was the financial statements of public passenger transport companies in V4 countries during the period 2018-2021 obtained from the international platform Orbis. Factor analysis made it possible to reduce the number of financial indicators from 17 to 2, 3 or 4 created factors (depending on the country and analysed year). It is a non-traditional multidimensional approach to working with financial information, allowing to identify new related groups of financial indicators based on their mutual relationship, and to name these groups appropriately with the elimination of multicollinearity. The long-term economic sustainability of public transport must be based on the marginal level of demand ensuring the required financial performance, which can also be quantified through defined groups of financial indicators. The applied method can be considered as quasi-universal approach for evaluating financial performance during deep macroeconomic disturbances.The period of Covid pandemic was one of the most restrictive times for the passenger transport sector. Due to the impact of anti-pandemic measures, the mobility of the population was limited, which was reflected in the decrease in sales and collapse of long-term financial indicators. Therefore, the period can be considered as the case of critical macroeconomic disturbances. The main purpose of this research is to identify the most relevant financial indicators that affect the transport enterprises performance and define new alternative way of grouping company financial indicators based on their mutual correlation. Therefore, this paper, using the tools of descriptive statistics and factor analysis, identifies the correlations of selected financial indicators that allow a better understanding of their interrelatedness and influence during extraordinary macroeconomic situations on the market. The data source was the financial statements of public passenger transport companies in V4 countries during the period 2018-2021 obtained from the international platform Orbis. Factor analysis made it possible to reduce the number of financial indicators from 17 to 2, 3 or 4 created factors (depending on the country and analysed year). It is a non-traditional multidimensional approach to working with financial information, allowing to identify new related groups of financial indicators based on their mutual relationship, and to name these groups appropriately with the elimination of multicollinearity. The long-term economic sustainability of public transport must be based on the marginal level of demand ensuring the required financial performance, which can also be quantified through defined groups of financial indicators. The applied method can be considered as quasi-universal approach for evaluating financial performance during deep macroeconomic disturbances.