Financial Performance Analysis of Engineering Companies: An Empirical Study during the COVID-19 Pandemic in Bangladesh

Abstract

As the largest crisis of the current world, the global pandemic “COVID-19” has wreaked havoc on the global economy, disrupting people's lives and wreaking havoc on financial markets and business industries. This scenario is almost the same in engineering companies. Due to the lockdown, a significant portion of construction activities were mostly restricted in the previous year, which had a massive impact on this sector. The pandemic's impact has caused numerous setbacks in this sector around the world. This study focused on 40 engineering firms and analyzed data from the COVID-19 period of 2019-2021. The key purpose of this study was to analyse the financial performance based on the determinants that have the most influence on the financial performance of the company. The findings of generalized linear model (GLM) show that, during the COVID-19 period, LNGPR had a positive impact on LNFP in engineering firms in Bangladesh, indicating that a 1% increase in LNGPR can increase LNFP by 0.80%. The variables LNLR and LNNPR have a positive impact on LNFP in engineering firms in Bangladesh, with estimated coefficient values of 0.44 and 1.22, respectively. LNDR has a significant impact on LNFP in engineering firms and a 1% increase in LNDR can enhance LNFP by 0.76 percent. However, variable sales growth has a negative impact during the COVID-19 pandemic. It is a positive sign that most of the variables have a significant and positive association with financial performance, except for sales growth. The authority should implement policies to restore sales growth and consistency in production distribution across countries.