| Summary: | Past events exert significant influence on corporate development and management behavior, thus impacting the financial sustainability of companies. Therefore, the consequences of the 2008 financial crisis and corporate tax reform introduced in Latvia in 2018 are well reflected in the financial conditions of Latvian enterprises. This study, which was conducted based on financial reporting data from 2015–2019 and aimed at the assessment of Latvian companies’ ability to survive during the crisis, revealed a substantial improvement in financial sustainability and in the efficiency of capital management, particularly visible in 2018–2019. On the other hand, the margins, which are a proxy of competitive advantage, remained at a low level, and the operating leverage level indicates the rather high riskiness of Latvian companies, which might be critical in overcoming the crisis triggered by COVID-19. The analysis also revealed that there was a large gap between the best and the worst companies. A significant discrepancy in the quality of the financial conditions was also found based on an analysis by region and industry.
|
|---|
