The covid-19 shock could fast deplete cash holdings of an average firm, a new study on firms listed across the world shows MUMBAI : Amid talk of a coronavirus-induced recession, businesses globally are facing liquidity and cash-flow problems.
The shutdown of economic activity has led companies to slash dividends and layoff employees. New research in the Journal of Accounting and Public Policy suggests that an average firm’s cash holdings would last no longer than two years in the current crisis.
In the study, researchers Antonio De Vito and Juan-Pedro Gómez evaluate the stress caused by covid-19 on 14,245 listed non-financial companies across 25 Organization for Economic Co-operation and Development (OECD) countries and China.