한계기업 회피를 위한 원가조정

During the Covid-19 pandemic in 2020, concerns about corporate bankruptcy are growing around the world as the company’s performance deteriorates sharply due to job losses, consumer confidence downturn, and global trade decline. In Korea, the number of marginal companies (zombie companies) has been increasing as the long-term low economic growth has continued in recent years, and the possibility of corporate restructuring is expanding due to the impact of Covid-19. Marginal companies refer to companies with poor financial structure that cannot cover interest expense with earnings earned through operating activities. Accordingly it has been suggested that the government should actively manage and supervise marginal companies. This study originated from the viewpoint of taking into account the discretionary decision-making (earnings management, etc.) of management about the substance of the company evaluated in the process of classifying and monitoring marginal companies. Specifically, I investigate whether or not that companies deviated from the crisis classified as marginal companies attempt for earnings management. In order to increase interest coverage ratio, companies suspected of avoiding marginal companies can make efforts to report high operating earnings. Specifically there is a method of actively reducing costs such as cost of goods sold (COGS) and selling, general, and administrative costs (SG&A). Therefore, I empirically analyze whether or not companies suspected of avoiding marginal companies reduce COGS and SG&A more when sales decreased by using an asymmetrical cost behavior framework. As a result of the analysis, companies suspected of avoiding marginal companies showed more reduction in COGS and SG&A when sales decreased compared to those that did not. Especially SG&A of companies suspected of avoiding marginal companies are more flexible when sales decrease. And this change in cost behavior was found to be more pronounced in companies with high financial risk. Therefore in the past two years, companies with interest coverage ratio less than 1 are actively working to cut costs in order to report high operating earnings so that they are not classified as marginal companies during the t period. This study provides empirical evidence that the classification criteria of marginal companies can act as an incentive for earnings management. In particular, as a method of observing earnings management attempts by companies suspected of avoiding marginal companies, the frame of asymmetric cost behavior is used to expand the field that can explain the manager’s motivation to influence cost behavior. In addition, it can be used as a basis for suggesting that it is necessary to prepare and consider a system that can adequately evaluate the possibility of earnings management in the process of designating and managing marginal companies.