Abstract
This study aims to reveal the effect of COVID-19 on the financial performance and position of the tourism sector. The financial statement data of the firms traded in the restaurants and hotels sub-sector in Borsa Istanbul were analyzed by using financial statement analysis techniques. According to the comparative income statements, the firms' total profit turned into a loss by declining 181%. The first 9-month analyses are essential in revealing the significant decrease in the firms' revenues and the fact that the expenses could not be reduced; the firms sold fixed assets and realized capital increases to continue their activities. The policymakers should develop a comprehensive cash support policy and develop short-term measures such as cost-free financing opportunities and expanding loan opportunities to reduce the damage.
TopBackground
The world economy was expected to grow at least 3% in 2020 (IMF, 2019; HSB, 2019). TURKSTAT announced on March 1, 2021, that Turkey achieved 1.8% growth in 2020. Many developed and developing economies, on the other hand, closed the last year with a negative growth rate. It could be foreseen only in the most pessimistic scenarios that a virus could have such damaging effects on the economies in this technology age. However, it did happen.
The pandemics caused various economic effects both nationally and globally. First of all, an epidemic reduces the likelihood of an individual or society living a healthy and prosperous life. With globalization, pandemics cause an uncertain process in terms of economic and social aspects at the international level. The measures to eliminate these uncertainties and prevent the epidemic affect all components of the economy profoundly.
Key Terms in this Chapter
Demand Shock: The sudden changes in the aggregate demand level in a given period.
Income Statement: A financial statement showing all the income and expenditures in a certain period and the profit or loss resulting from the entire financial performance of the enterprise.
Economic Growth: The increase in the production of economic goods and services, compared to one period.
Supply Shock: Sudden changes in production level due to external shocks in a given period.
Household: All people living under the same roof and make common financial decisions.
Supply Chain: A network of producers and distributors that produce raw materials, deliver them to producers, convert them into intermediate and final products, and distribute final products to customers.
Balance Sheet: A financial statement showing the assets owned by a company and the resources these assets are provided from at a specific time.