An Exploration Of Cash Reserve Position Of Us Companies Flush With Buybacks During Covid 19 Using Event Study Model

Abstract

This paper examines US companies from different sectors involved in extensive buybacks in the recent past making the most of every opportunity like high abnormal cumulative returns. This study evaluates their current degree of liquidity position during COVID-19 linked with share repurchases. It further assesses companies’ standing on the effectiveness of cash management, if they were not involved in the voluminous buybacks.

 The nature of our research is of exploratory type using deductive approach under quantitative research design with the event study model applying on a secondary database.

The study discloses a decline in cash position or reserve of the companies measured with the help of simulated liquidity, solvency and performance parameters.

The limitations of this research is that it will majorly focus on US companies and may not be able to give a truly global perspective. The research outcomes pertaining to share repurchases bring to bear COVID-19 sort of state of affair. All implications with futuristic importance are discussed.

This research apprises the liquidity position of companies during COVID 19 linked with extensive buybacks. This is the first effort to capture future revenue growth simulation associated with cash reserve positions during pandemic. This study identifies companies affected or not during Covid-19 and lays down the guidelines that companies should follow while carrying on buybacks