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Monitoring debt levels is crucial for sustainable growth from "summary" of Romancing the Balance Sheet: For Anyone Who Owns, Runs or Manages a Business by Anil Lamba
Understanding the dynamics of debt is essential for any business aiming for long-term success. Debt, when managed appropriately, can serve as a powerful tool to fuel growth. However, unchecked borrowing can lead to significant risks that threaten the very foundation of a business. It is imperative to strike a balance between leveraging debt for expansion and ensuring that repayments do not become a burden. Regular assessment of debt levels provides insight into the financial health of the organization. A rising debt-to-equity ratio can indicate an increasing reliance on borrowed funds, which may lead to instability if revenues do not keep pace. On the other hand, a well-structured debt can enhance operational capacity, allowing for ...
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