Editorial

Abstract

The June 2020 edition (Volume 6 Issue 1) has four articles, of which the first two discuss the impact of COVID19. In the first article, the author explains how the stringent lockdown measures have given a dual shock to the Indian economy: a decline in demand as well as a fall in supply across several sectors of India’s domestic economy. The article mentions the steps taken to enhance the liquidity in the system and emphasizes the need to bring the focus of policy measures to overcome the supply chain disruptions and stimulate the demand. The second piece talks about the challenges that banks will face on their key performance, asset quality, and solvency parameters as the economy reels under the impact of the COVID-19 pandemic and witnesses the second wave of corporate bankruptcy and liquidation. The third article is an operational guide to covered calls. It covers the key concepts, including accounting and tax treatment, which helps understand and use this option strategy. In the fourth piece, the author introduces the idea of degree of total leverage and describes its use to forecast earnings. The article illustrates how to use the information on Income statements to compute contribution and leverage measure and use it to predict profit before taxes.