Tim T. answered • 03/23/19
Math: K-12th grade to Advanced Calc, Ring Theory, Cryptography
I will explain this from a business point of view. It can be a couple of reasons why companies do this. Number 1: Companies sit on cash while they have debt to save money. Saving money is a good way to clear debt over time. A company like this does not have enough revenue coming in to spend all their money on debt. In this case, the company will not break even if they do spend it on debt. Number 2: A company may want to see how much revenue they can bring in after making some changes to the business. If they made more than the amount of debt they owe, then they can still function as if the debt was not there.
