THE EFFECTS OF THE COVID-19 PANDEMIC ON FREE CASH FLOW, DEBT-TO-EQUITY RATIO, AND EARNINGS PER SHARE FOR LISTED COMPANIES ON THE DOW INDUSTRIAL AVERAGE.

In this study, the authors investigate the Covid-19 effects, using time-series intervention analysis, on the free cash flow (FCF), debt-to-equity ratio (DER), and earnings per share (EPS) of 28 companies listed on the Dow Jones Industrial Average. Results showed that 36% of the companies had a significant reduction in free cash flow due to the pandemic, and 7% had a significant increase in free cash flow. On the other hand, the pandemic did not affect free cash flow in 57% of the companies. For DER, the majority of the companies (64%) were not affected by the pandemic. There was a significant increase in the DER under the pandemic in 11% of the companies. On the other hand, 25% of the companies showed a significant decrease in the DER. Results for the EPS showed a significant decrease in EPS in 29% of the companies and a significant increase in 25%. The pandemic did not affect EPS in 46% of the companies. All three financial ratios were affected by the pandemic. However, free cash flow was most affected. The significant negative effect could have reduced profitability and the stock price. [ABSTRACT FROM AUTHOR]