Higher debt, palatable gearing

TheStar Sat, Dec 29, 2018 10:01am - 5 years View Original


Predictable cashflow: Companies, including TNB, take on debt to optimise the capital structure. — Bernama

Predictable cashflow: Companies, including TNB, take on debt to optimise the capital structure. — Bernama

DEBT is an essential part of any business. All companies should have some amount of debt to help finance its growth and investments for the longer term. It is an efficient way of managing the balance sheet.

But taking on too much debt can restrict a company’s operational flexibility, and increase its risk of financial problems in a challenging economic environment.

So, there is only a fine balance between what is regarded as “healthy” and “dangerous” debt level and it varies across businesses and industries.

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