If a company borrows money then how it will affect the net income negatively. can u please explain me.

Sep 10 2012 08:19 PM

Net Income = Revenue - COGS - Opex - Interest - Tax

So if you take loan, then interest goes up in the formula below and hence net income decreases.

Sep 10 2012 08:25 PM
So if you take loan, then interest goes up in the formula below and hence net income decreases.