Question

Give an example of a company that has suffered from the current economic challenge related to the coronavirus, and whether it suffers from illiquidity or insolvency. Or both. And what you recommend be done.

Answer 1

Below are the few companies that are suffered from current economic challenges due to Corona virus.

• Flipkart
• Amazon
• Ola
• Uber
• Zomato etc.

All the companies states above works based on the number customer on daily basis. And these companies have huge number of customer in the market in the field of e-commmece, transportation, and food service. Etc.

Due to Corona virus in different parts of the world, most of people are jobless and not have sufficient money to purchase in the E-commerce websites, customers are scared to travel in cars/cabs and due to lockdown effect most of restaurants have closed due to lockdowns. This eventually have made no profit to the above companies therefore companies are facing liquidity issues and some companies are not able to raise the cash to do daily business activities. Hence companies facing both liquidity as well as insolvency issues.

Below are the recommendation to be made to overcome from the liquidity and insolvency.

• If the customers stays in homes during the lockdown, country can break the Corona chain thereby companies can become operative eventually enhances their profits, enhances the liquidity, overcome from the insolvency etc.
• To overcome from insolvency, companies can take loans from the reserve banks to operate their business.
• Transportation and food service with help of local government can support the Corona patients, quarantine and poor people in service food and basic necessities which improve the social ethics and might enhance the liquidity from government and other agencies.

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