Extract
[...] This cash shortage underscores the importance of anticipating working capital needs in a context of business disruption (Deloitte, 2020). In the face of this systemic risk, public authorities have deployed several support measures. The People's Bank of China has unlocked 300 billion yuan (approximately $42 billion) in the form of low-cost loans to affected companies. At the same time, local and provincial governments have implemented aid worth an estimated $70 billion. These measures illustrate the central role of monetary and fiscal policies in supporting corporate cash flow during exogenous shocks (Deloitte, 2020). [...]
[...] Simulations show that in the absence of a crisis of companies would have needed liquidity in 2020. With the crisis but without public support, this proportion would have jumped to while the use of support measures limited this increase to 24%. The gap is just as clear for solvency: 11.9% of companies would have become insolvent without aid, compared to only 6.6% with support (Hadjibeyli, 2021). These measures had a particularly strong effect on small businesses through the solidarity fund, and on the largest through the use of partial activity. [...]
[...] The additional debt generated by the crisis would have reached 96 billion euros without support; it still stands at 76 billion with the aid, proof that some companies, particularly large ones, continued to finance themselves through debt despite public intervention. Bibliography Deloitte. (2020). COVID-19: Cash Flow Management in a Crisis Period. Deloitte Development LLC.https://www2.deloitte.com/ Demmou, L., Franco, G., Calligaris, S., & Dlugosch, D. (2022). Liquidity Shortfalls during the COVID-19 Outbreak: Assessment and Policy Responses. Économie et Statistique / Economics and Statistics, (532-533), 47-61.https://doi.org/10.24187/ecostat.2022.532.2070 Bureau, B., Duquerroy, A., Giorgi, J., Lé, M., Scott, S., & Vinas, F. (2021). [...]
[...] Decisions on inventory, accounts receivable, or payment terms affect the entire supply chain. Proactive risk management of suppliers - including taking stakes in critical partners - can become strategic to ensure business continuity. Indeed was marked by an unprecedented economic shock for France, with a contraction of GDP reaching 7.9%, the most severe decline observed since the establishment of national accounts in 1949. This upheaval led to a significant increase in the gross debt of non-financial companies, which rose by 12.2%, or ?217 billion. [...]
[...] Public support measures played an important role in cushioning the impact, reducing the dispersion of cash shocks. Before intervention, the proportion of companies experiencing a negative shock reached compared to 50% in normal times (2018). After support, this proportion returned to a near-normal level although the extremes remained distorted. In of companies experienced a marked increase in their net debt (compared to 13% in 2018) and 24% a strong decline (compared to 10% in 2018). This polarization is even more pronounced among fragile companies before the crisis, reinforcing their structural vulnerability. [...]
