The Impact of Debt

There is, however, one common practice the old companies share: a conservative approach to managing finances. These firms are very reluctant to go into debt as a way of funding their business.

The strategic question in industrial finance, assuming you have something to work with in the way of a going business, is how to optimize its elements. The latitude for opinion, or subjective judgment, here is wide. But I think it would be generally agreed that, in principle, debt enhances the return on the stockholders’ investment, while at the sa