Impact of Covid-19 on the Firm Financial Performance: A Case Study of Pakistan Stock Exchange

Abstract

The purpose of the study is to check the performance of the non-financial firms of Pakistan stock exchange. The data was gathered of different sectors from the DataStream for the year 2016-2020 to analyze the impact of the covid-19 on the company’s performance. By using leverage, firm size and covid as a dummy variable, the result showed that the positive impact on some companies like pharmaceutical, electricity and food but also effected negatively on chemical. Moreover overall result shows the negative impact on return on asset , as return on equity have the positive impact with leverage which mean companies were using debt rather than fresh equity. The epidemic situation affected the economy severely due to the proper lockdown which were imposed in everywhere around the globe, with this lockdown condition the companies were disappearing and near to be vanished the Pakistan stock exchange. Covid-19 effected rigorously the daily wages employees and unemployment rate were too high in corona period, nearly half of the employees were fired from the offices due to disruption condition which clearly states that the policies, rules and future recommendations of the companies are not satisfactory for any kind of syndrome consequence happened in the state. The companies experienced financial distress in the time of covid due to the mismanagement of the higher authority or the policy makers. Therefore future directions and future planning is more important to run any business or any kind of company which also enhances the Pakistan economy as a whole .This study clearly demonstrate the firm’s performances in epidemic period