Cosmetics companies: income developments in time of crisis

Abstract

PurposeThis study offers a focus on the income dynamics of the sector, analyzing the evolution of the main profitability indicators (ROE, ROA, ROI and ROS) of 457 Italian companies in the 2008–2020 period. So, it is possible to verify the reactivity to the global financial crisis that began in 2008 and the first indications on the 2020 pandemic.Design/methodology/approachThe analysis uses descriptive statistics tools and the ANOVA method of analysis of variance completed by Tukey's test, useful for identifying the existence of significant differences between geographical macro-areas of the country.FindingsThe results show positive dynamics in a sector that has been able to absorb the negative consequences of the great global crisis, improving its profitability over the years, albeit with differences in the macro-regions of Italy.Research limitations/implicationsThe study considers only the companies that survived the crisis, so, presumably, the strongest. In the future, other ratios should be considered to have a more complete view. It is a quantitative study based on the financial report data that neglects other important economic factors.Practical implicationsPublic policies might use this study for a better intervention in support of the sector. Besides, internal management may compare company outcomes with average sector outcomes to identify improvement prospects.Social implicationsThe research represents a significant basis considering the risks deriving from the supply of low-cost Asian products that could significantly affect the profitability of Italian companies in the future.Originality/valueThe study contributes to the literature by providing a quantitative analysis of the dynamics of the sector, through the comparative information that may be deduced of balanced sheets in the course of the years.

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