Question

Given the current Coronavirus induced crisis, which of these pairs of companies do you believe is more likely to default in the next year? a. Athleta (clothing chain) or Campbell Soup Company b. Allstate Insurance Corporation or Ford Motor Company c. Revolution Brewing or Macys Department Stores Provide a couple of sentences describing your reasoning for each choice.

Answer 1

Ans) a. Athleta (clothing chain) or Campbell Soup Company

The above pair is more likely to default next year. Reason is the business of the compaines. Athleta is engaged in business of clothing , in era of corona virus, consumer spending will reduce towards fancy cloths and hence it's margin will be affected, further due to corona, whole supply chain is disturb for clothing companies making it difficult for company to send it's cloths to the market

Campbell Soup Company is engaged in food industries. Food industries is most affected due to corona due to shutting down of hotels and trend of customer to eat at home or to eat fresh food. Thus this will effect it's sales and can cause problem in future