Question

Briefly summarise the importance of the operating and financial review in assessing how the financial information can assist users to make resource allocation decisions in light of the current COVID-19 pandemic. You may need to refer to some financial and business periodicals/newspapers for the financial impact of the crisis.

Answer 1

During the current situation of COVID 19 pandemic the whole world is facing the financial issues in the form of job loss,loans becoming NPA,money spent in tackling the pandemic,external borrowings,no new hiring etc.

In the current situation one needs to make the financial planning to cope up with the situation and survive the difficult time.

Its not only us who are suffering from the pandemic the whole world including the rich,big firms and even the government are facing many difficulties with the pandemic.

According to the Economic Times,the world bank estimates the 2 trillion $ has been expended approximately.

The Indian Government is having around 1 lakh crores of external debt acoording to latest information by the finance ministry.

Loan morotorium by the banks and RBI are facing lack of interest income from the borrowers leading to the fall in profit of the banks.

As per the RBI,no bank will declare dividend till further notice will impact the shareholders return who invest their money for dividend income.

By taking the note of these financial information one must assess the risk facing by the world on the large scale and can take decisions taking a long term approach against their financial issues and their comparability to cope up with the situation in the near future.