Financial Analysis of the Production Industry of Personal Care – Cosmetics in Greece: Development and Prospects

Abstract

This study conducts a financial analysis of the Greek personal care and cosmetics
production industry, with particular emphasis on its prospects and inherent risks. The
analysis draws on the published financial statements of four leading firms, which
collectively account for nearly half of the sector’s sales. Methodological tools include
common-size and trend statements, as well as a wide range of financial ratios, enabling
the assessment of capital returns, liquidity, profitability, activity, and leverage at both the
firm and industry level. Additionally, Altman’s Z-score model was applied to estimate the
probability of financial distress.
The findings reveal notable disparities among the four companies with respect to
performance and financial structure. At the sectoral level, results indicate satisfactory
liquidity and relatively low debt exposure. Nevertheless, net profits between 2017 and
2021 were characterized by considerable volatility, although the last two years
demonstrate signs of stabilization in profit margins and overall performance. Evidence
suggests that firms capitalized on opportunities arising from the pandemic, reducing their
reliance on external financing, strengthening credit policies, and achieving improvements
in operating margins. Regarding financial distress, the Z-score consistently remained
within the gray zone across the examined period. Overall, the upward movement of the Z
score in 2019–2021 indicates an improving resilience profile, while persistent inter-firm
heterogeneity underscores the importance of working-capital discipline and financing
structure in sectoral sustainability.

JEL Classifications: G330
Keywords: Personal care industry, financial ratio analysis, bankruptcy prediction, liquidity,
profitability