Revenue Rise with Loans

I once worked with a telecommunications company whose mission included the goal “to maximize our stock portfolio.” The leadership decided this meant they should partner with a financial institution in order to manage their portfolio more efficiently. What they needed was a partner to help them—an investment bank—but what they did was acquire a bank [...]

While the choice of the most appropriate measure of corporate leverage is an arbitrary task, empirical studies indicate that the financing gap is able  to explain a lot of the variance in credit spreads. It is defined as the difference between capital expenditures, including outlays for inventories, and the amount of cash that corporations need [...]

Yet, free cash flow numbers are not available for all companies. European firms, for example, historically have published only profit figures. Therefore, we also look at EBIT and EBITDA figures. Of these two the latter is preferred because it deducts cash that is needed to maintain the operations. Specifically, on the macro level we use [...]