Eagle Daddy

15/03/2026

https://www.facebook.com/share/p/1CNNmpUZsA/

31/12/2025

Happy New Year

09/11/2025

You can't be successful in business without taking " RISK"

31/10/2025

Never forget 3 types of people in your life

10/05/2025

Both can be true.

20/04/2025

17/04/2025

Optimal Use of Financial Leverage in a Corporate Capital Structure

A company needs financial capital to operate its business. For most companies, financial capital is raised by issuing debt securities and by selling common stock. The amount of debt and equity that makes up a company’s capital structure has many risk and return implications.
Financial leverage is the extent to which fixed-income securities and preferred stock are used in a company’s capital structure. Financial leverage has value due to the interest tax shield that is afforded by the U.S. corporate income tax law. The use of financial leverage also has value when the assets that are purchased with the debt capital earn more than the cost of the debt that was used to finance them.
Under both of these circumstances, the use of financial leverage increases the company’s profits. With that said, if the company does not have sufficient taxable income to shield, or if its operating profits are below a critical value, financial leverage will reduce equity value and thus reduce the value of the company.

04/04/2025

How Can a Company Quickly Increase Its Liquidity Ratio?

A liquidity ratio is a measurement of a company's ability to pay off its current debts with its current assets.
There are various types of liquidity ratios, including the current ratio and the quick ratio. Usually, a liquidity ratio greater than 1 is a positive sign.
A higher liquidity ratio indicates a company is in a better position to meet its obligations but can also indicate that a company isn't using its assets efficiently.
Companies can increase their liquidity ratios quickly in a few different ways, including using sweep accounts, cutting overhead expenses, and paying off liabilities.
A company calculates a liquidity ratio by dividing its current assets by its short-term liabilities.
A liquidity ratio can be a valuable metric for market analysts and potential investors. That's because it can help them to determine if a company is financially healthy enough to pay off its short-term debts and other current liabilities.
A low liquidity ratio could signal a company that is in financial trouble. However, a very high liquidity ratio may show that a company is too focused on liquidity, to the detriment of efficiently utilizing its capital to grow and expand its business.