KrK
Heavy Artillery For The Little Guy
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| reply to TamaraB
Re: All i can say is WOW
said by TamaraB  :but what ever happened to the notion of using revenue to pay your bills? Why is it that they, and almost every other big company have to amass such enormous debt just to stay afloat? 21 Billion in debt? I'll bet that's more than the company is worth! They Borrow money to buy out competitors and smaller operations, and to expand QUICKLY.
There's only 2 ways to expand:
Route 1:
Slowly, steadily, surely. You use revenues reinvested in the company to steadily grow and expand into new areas. This is the old school way of doing things.
Route 2: You borrow money, (or issue stock) to generate a lot of cash and then buy up existing companies and take them over. This allows you to expand your company quickly, but it does amass debt. If you overpay, or you end up having to spend a lot of money later "Integrating" your purchased asset into your company, you may take a bath on the deal. Especially if the takeover and the resulting problems cause you to bleed customers.
So it's a gamble, you can grow fast, and if it works out well, you "Make money fast" and everyone's happy. However blow it, and you're left with an anchor of debt around your neck dragging you down. Welcome to Charter.
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"Fascism should more properly be called corporatism because it is the merger of state and corporate power." -- Benito Mussolini
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