Effects of COVID-19 on the Current Liabilities of Companies

Effects of COVID-19 on the Current Liabilities of Companies
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Understanding the importance of external and uncontrollable events to a company's financial performance is essential for any manager. It allows him to better understand how to act accordingly and utilize various strategies to improve his overall financial capabilities. Accordingly, one of the problems that plagued many companies and organizations is the presence of the COVID-19 pandemic. Because of this pandemic, several companies that are unable to find new ways of adapting to the community restrictions in place and the lesser economic activity have suffered severe losses in their income statement. Accordingly, the pandemic affected the company's current liabilities.
Because of the lesser economic activity, most companies tend to increase their current liabilities relative to their current assets since they would still have to pay for the business's daily operations. ...