Transport companies based on their size and management type: has Covid-19 conditioned their solvency?

Abstract

Transport is one of the essential services contributing to a country’s development. The global pandemic caused by Covid-19 has affected different sectors, one of the most affected being public transport services. In Spain there are several transport companies, some of them are public, and others are private. The main objective of this paper is to study the profitability, liquidity, and solvency situation of transport companies considering their size and type of management. The impact of the Covid-19 pandemic on transport companies will be analyzed too. After descriptive analysis of the companies by ratios, the Altman Z-score indicator has been used. This methodology has been used to assess whether the health crisis has compromised the solvency of these companies. The results have shown that privately managed companies are healthier and have a lower risk of insolvency than public companies.In addition, small companies were more solvent than big companies. This study is an essential contribution to the academic literature, public administration, and management of companies.