Analysis of financial distress risk in public listed agrifood companies in Lithuania

Abstract Financial instability has continued to unleash unparalleled challenges upon public listed agricultural food companies in Lithuania. Food supply chains experienced disruptions, consumer demand waned and the economy endured a downturn. Major public listed agricultural food companies confronted declines in total assets and book value of total assets as the pandemic disrupted their operations and eroded revenues. While the government supportive measures have provided relief, challenges such as soaring energy prices and inflation persist, consequently hindering investment in the agricultural food companies in Lithuania. This study examines the role of financial stability in sustainability of public listed agricultural food companies in Lithuania. We analyze and compare the impact of financial distress risks within the Lithuanian agrifood listed on Nasdaq Vilnius secondary securities market using the bankruptcy probability prediction model. Specifically, our empirical strategy is based on Altman Z score, Springate S score, Zmijewski J score and Grover bankruptcy prediction model. Our results indicate that the financial position of public listed agrifood companies remains relatively strong and robust despite the combined challenges imposed by the Covid-19 pandemic, escalating energy prices, inflationary pressure, rising interest rates, supply chain disruptions and waning consumer confidence. We also observed a relative increase in assets and sales, but it is accompanied by rise in indebtedness of the public listed agrifood companies in Lithuania.