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How do you find out if a company is using Debt for growth?



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Hey,
i had a query regarding the video- Analyzing Domino's balance Sheet, You mention that part of the operating income is being used to finance the company's growth, would just like to know how exactly you find that out from the balance sheet. It is obvious that they are using debt to finance most of the operations but how exactly do you read that part of the company's operating income is being used to scale the company

2 Answer(s)


1

Hi Marc,

since their share capital is not increasing over the years and were almost constant....it means that the profit generated is not being added to the share holders equity but is used up to invest and expand as you can see the gross block increasing over the same time period.

Dominos were using both the profit as well as taking huge loans to finance their expansion.

Mr. Binny pls do confirm if this is right.

0

Marc, Suhas is absolutely right. Thanks much Suhas.

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