Quote:
Originally Posted by pornguy
So basically you are saying that just any ass hat and his brother can go out, Open a business and use only the banks money and a promise..
Well maybe thats where the US went wrong.
how a company can have profits in the BILLIONS and have a cash flow issue or the need to take a loan. If they have no cash flow, and they have to take a loan, then they have no profits.
Take for instance your Boing example.. If they had a 2.2BILLION dollar Profit in 2006 they where is the money. PROFIT means the BILLS are PAID.. Where all that CASH FLOW going.
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Real life example.
Wal Mart profit after taxes last year. $13.7 billion
Expected capital expenditures this year $15 billion
Of which 35% went to opening new stores, 8% to remodels , 23% to information systems upgrade and the rest to opening stores internationally.
Now that allows Wal Mart to open over 300 new stores. Each new store will bring additional profits.
Part of this will be financed with debt. And why not? The expected lifetime profits dramatically exceed the capital expenditures.