Accounting and financial analysis of business groups with an example of J&P-AVAX S.A

Abstract

Mergers and acquisitions, have led to the rapid development of big groups of firms driven by the global competition and the rapid liberalization forces. These groups consist of a parent company and a number of individual subsidiaries.

The economic recession, which appears in Greece in 2008, affected the performance of the Groups and especially the Groups in construction sector. In this Master’s dissertation, we test the hypothesis that in recent period of economic recession, the financial crisis has affected business performance and the overall economic health of business groups and its subsidiaries. The investigation is made by reviewing the financial statements, using the relevant ratios and presenting the results of the construction company J&P-AVAX S.A. and its subsidiaries. Through this analysis, we found that the financial crisis affected the Group’s performance as well as its subsidiaries’ performance. The subsidiaries from the unrelated diversification strategy of the group appeared better results during the economic recession. Some of the subsidiaries seems to recover during the period 2017-2018 but the possible positive effect to the Group’s performance in the future is a matter for further study. Recommendations for better construction companies’ performance are cited. More aggressively, occupation abroad and turn to other business activities may boost the efficiency and effectiveness of enterprises in the effort of rebuilding the Greek economy.