Org Mobile Site
Well, if they'd skip one cycle of financing, they could use all that profit for financing and wouldn't have to pay any interests. That way they would have more money for financing, unless you are saying that they only use the profits to pay the interest on their loans while taking up ever more loans in which case it's no wonder the industry is in big trouble if you ask me.
I don't think it's quite that simple, alot of business need constant finance to reinvest in thier business and the major problem with a recession is not only will thier sources of finance dry up but other companies will extend thier 'debtor days' meaning they take longer to pay the other company (for stock or whatever they buy) generally larger companies will do this to smaller companies as they can get away with it, meaning little company in example will need finance to make up the temorary short fall, this constant finance and reinvestment as long as it is done well will cause the company to grow...
I don't think it's quite that simple, alot of business need constant finance to reinvest in thier business and the major problem with a recession is not only will thier sources of finance dry up but other companies will extend thier 'debtor days' meaning they take longer to pay the other company (for stock or whatever they buy) generally larger companies will do this to smaller companies as they can get away with it, meaning little company in example will need finance to make up the temorary short fall, this constant finance and reinvestment as long as it is done well will cause the company to grow...
Originally Posted by LittleGrizzly:
I don't think it's quite that simple, alot of business need constant finance to reinvest in thier business and the major problem with a recession is not only will thier sources of finance dry up but other companies will extend thier 'debtor days' meaning they take longer to pay the other company (for stock or whatever they buy) generally larger companies will do this to smaller companies as they can get away with it, meaning little company in example will need finance to make up the temorary short fall, this constant finance and reinvestment as long as it is done well will cause the company to grow...
Yes, I'm aware it's more complicated, we have managed to make a matter of plus and minus so complicated that we can discuss the whole thing for hours until everybody is confused, everybody thinks she/he is right and companies go bankrupt anyway. It really works, doesn't it?I don't think it's quite that simple, alot of business need constant finance to reinvest in thier business and the major problem with a recession is not only will thier sources of finance dry up but other companies will extend thier 'debtor days' meaning they take longer to pay the other company (for stock or whatever they buy) generally larger companies will do this to smaller companies as they can get away with it, meaning little company in example will need finance to make up the temorary short fall, this constant finance and reinvestment as long as it is done well will cause the company to grow...
It really works, doesn't it?
Well it has its problems but generally...yes. For a really simple example imagine a game of command and conquer, if someone gave you a loan of 10,000 ore (ontop of your startup capital) you can expand and make more money far more quickly than an opposing player who doesn't have a loan. Of course in real life businesses can be unsuccessful even with expansion and finance, but mostly they expand and make more money and are able to pay back thier debts...
With the bankrupt companies it was more down to bad managment and other problems with companies rather than the system (though you could accuse the 'system' of having these flaws as inevitably built in) some companies struggled because of the recession rather than thier own bad practice, these are companies we should support as they are profitable and will return to this status once we get through the recession...
Well it has its problems but generally...yes. For a really simple example imagine a game of command and conquer, if someone gave you a loan of 10,000 ore (ontop of your startup capital) you can expand and make more money far more quickly than an opposing player who doesn't have a loan. Of course in real life businesses can be unsuccessful even with expansion and finance, but mostly they expand and make more money and are able to pay back thier debts...
With the bankrupt companies it was more down to bad managment and other problems with companies rather than the system (though you could accuse the 'system' of having these flaws as inevitably built in) some companies struggled because of the recession rather than thier own bad practice, these are companies we should support as they are profitable and will return to this status once we get through the recession...
I'm not as much against the system itself as I am against the people using it, the system itself is just so complicated nowadays that everytime there is a crisis you get about ten different opinions on how to get out of it which tells me that around 9 people don't really know how the system works and quite honestly I can usually not say who that is... 
what I can tell however is that the system rewards people who do everything to make money and that alone tells me that people at the top of the system are very likely to lie for their own benefit and cannot be trusted, it's the nature of the system so I'm against them per default because it's the logical thing to do for my own benefit, or something...
what I can tell however is that the system rewards people who do everything to make money and that alone tells me that people at the top of the system are very likely to lie for their own benefit and cannot be trusted, it's the nature of the system so I'm against them per default because it's the logical thing to do for my own benefit, or something...
Single Sign On provided by vBSSO