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Coverage Ratios: What We Can Uncover in the S&P [View article]
Business debt is fundamental to the healthy growth and expansion of the economy. Essentially, it is applying utilization of current resources to derive value add in the future. What do I mean by that? It is using assets to create goods and services in the future. Only this allows assets to be used for something called consumption of new things. Without allowing healthy business debt, we would most likely only be able to buy used clothes and other people's unwanted goods on e-bay.
Sure, a few rich companies can make some goods and services without debt. But prosperous the world would not be if every business didn't use debt. Nor would the world be as rich or efficient as it is today.