Keywords
zombie companies
enterprise
negative equity
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Abstract
The article raises the problem of the incidence of so-called zombie companies in the economy. Zombie companies are most often defined as unprofitable, indebted, financially troubled companies that often have negative equity. The purpose of this article is to present the financial condition of zombie companies listed on the Warsaw Stock Exchange stock market, as well as to show the indications that threaten the continuation of business operations of zombie companies. The data from 2018–2021 is taken from the Notoria Serwis database, which refers to the annual financial statements of companies listed on the Warsaw Stock Exchange. The article uses literature analysis and financial analysis as the main research methods. The research results show that there are zombie companies with negative equity in the capital market in Poland, whose share among listed companies on the WSE stock market was 2.9–3.6% in 2018–2021. The most numerous group of zombie companies with negative equity were business entities included in the category of small businesses. Zombie companies listed on the capital market in Poland were mainly characterized by problems with ensuring profitability and maintaining liquidity, and their activities were accompanied by a high risk of bankruptcy. The zombie companies were able to continue their operations mainly due to the financial surplus they generated, which allowed them to pay principal installments plus interest. The continuation of zombie companies was mainly influenced by the continued low interest rates set by the monetary authorities in Poland 2018–2021, the government guarantees provided to businesses applying for bank loans, the subsidization of unprofitable operations, and the state aid directed to companies operating under COVID-19.
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