Author Topic: MLB financials, NoVA development, Etc.  (Read 2005 times)

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Offline tomterp

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Re: MLB financials, NoVA development, Etc.
« Reply #25: November 29, 2010, 11:13:57 AM »
My problem with all of these statements is one of the largest liabilities is debt, and one of the largest expenses is servicing that debt. call me a pinko commie or whatever, but this reminds me of a leveraged buyout being used to take over a perfectly healthy company then slowly killing it with the cost of servicing the debt

Usually it's not the debt alone, but the debt narrows the margins so much that there is no room for error.  A slight downturn, or unanticipated increase in expenses, can wipe out slim profit margins.  Of course, the opposite is true, for very little money down the returns can be huge.

Garfinkel's, Woodward and Lothrop are two local examples of killed by debt taken on in LBO's.