The effect of inclusion of companies in the sustainability index on the financial performances in the Covid period: a research on the automotive industry

Abstract

Purpose- With this research, by examining many parameters that are effective in the automotive sector, answers are sought for what the companies in the sector will face in the future and how they can manage the crises. The effects of unpredictable problems in daily life on the automotive industry with Kovid 19 are examined. The aim of the research is to determine the effects of being included in the sustainability index while investigating the financial performance of the sector in extraordinary periods such as the Kovid 19 pandemic. The research aims both to shed light on the sector and to be a guide to be followed in order to increase financial performance in possible situations that affect large masses such as pandemics. Today, the financial performance of companies is of great importance for investors and shareholders. The success of the enterprise, in other words, the level of achievement of the objectives of the enterprise and its continuity are evaluated by performance measurement. When the financial performance calculations are examined in the studies, the capital structure, liquidity status, investments in fixed assets and sales are taken into consideration. In addition to these criteria, it is predicted that whether or not to be included in the sustainability index will also affect the financial performance. Methodology- In this study, the data of 23 companies in the Automotive Sector are taken into account. In this context, the data on the balance sheets and financial reports of these companies for the years 2018-2021 are handled in quarterly periods, for a total of 16 periods. The data is taken from the Public Disclosure Platform (KAP). Ratio calculations were made with the prepared data. The effect of the companies operating in the Automotive Sector in the sustainability index on their financial performance was analyzed using the "Independent Groups T Test" and "Mann Whitney U Test" in the SPSS program by using the Variables of Current Ratio, Financial Leverage, Return on Assets, Return on Capital, Net Profit Margin. Findings - In the analysis made according to whether they are included in the sustainability index or not, the significance levels of the following variables were determined to be less than 0.05: Return on Assets 0.032, Net Profit Margin 0.016, Current Ratio 0.00, Financial Leverage 0.00 Equity Return 0.003. It has been found that the companies' inclusion in the sustainability index has a statistically significant and positive effect on their financial performance. Conclusion- It has been concluded that being included in the sustainability index, which is calculated according to social, institutional and environmental factors, positively affects the financial statements of the companies. At the same time, it has been determined that the companies in this index use their assets effectively to generate profit. Keywords: Covid-19, financial performance, automotive sector JEL Codes: G10, G17