Question

The COVID-19 pandemic has had a devastating effect on the U.S. economy, not seen since the great depression. The government has passed several emergency funding bills to try to keep U.S. companies from failing. From recent news, choose a company that has been affected by COVID-19 and discuss actions taken (or not) to help preserve shareholder's equity. From a financial point of view, what is happening to U.S. companies, and should the U.S. help these companies, yes or no?

(avoid those 2 companies:  J.Crew and Nordstrom)

Answer 1

Covid 19 pandemic has depressed the economy of almost all the countries in the world. Government has ordered to people's to stay in home therefore the all industries including service sector (excluding some essential services) are stopping from working. International trade, transportation restricted by each country. That impacts huge on economy.

In US covid 19 has huge impact on small businesses. More than 99% businesses are small businesses in America and they employ more than half of work force.

In response to economic failure US government has taken no of legislative and administrative steps to provide emergency funding for business in the form of forgivable loans or payroll relief but not both.

JP Morgan

Regarding financial performance in 2020 in such covid 19 pandemic company following more transparency with their shareholders.

Company has stopped buying back of stock. Company has taken prudent action by way of stopping buying back share. Because don't any one how this crises will end. Stopping of buying back. CEO of the company says to their shareholders that failed to meet financial target due to covid 19 pandemic. GDP has fallen by 30% in first quarter. Investment management revenue also fallen.

Company said that Earnings attributable to common shareholders are fell down.

Therefore we can conclude that the not measure action taken to preserve shareholders equity.

2. Goldman Sachs