how is it that in times of crisis major businesses will go bankrupt within months? Do they have no savings or what?

Question

how is it that in times of crisis major businesses will go bankrupt within months? Do they have no savings or what?

In: Economics

Answer 1

Another point here is that for the past few years borrowing money has been extremely cheap, so a lot of companies have been taking more debt because it made financial sense. As a result, though, companies have a lot of interest to pay and little cash.