Clustering of Croatian Software Development Companies Based on Their Financial Indicators

The main objective of this study is to examine the financial performance of companies in the Croatian software development sector and identify which financial indicators could be predictive of future profitability. The research uses the Financial Agency (FINA) data focusing on pre and post-COVID-19. Cluster analysis of companies is performed based on their financial indicators. Four clusters of companies were identified. Findings indicate that there is no statistically significant difference between the clusters in the profitability growth rate after the COVID-19 crisis. However, the observed period might be too short to measure the long-term effects. The financial analysis of companies in the Croatian software development sector gives insight into how the sector operates and thus provides valuable information for policymakers who would like to support its growth and development.