hello fellow traders,
this is what I read in a Sunday paper yesterday:
mainly for small companies at year end - "window dressing balance sheet using director loans to prop up the balance sheet and reduce the amount of debt on the day."
I cant understand how the loans would lower the amount of debt; even if the company pays a big debt with that loan, the loan will still have to be on the balance sheet as a debt to the director to be paid later.
so the amount of debt basicly remains the same in my opinion, unless a loan from a director doesn`t look so bad.
what is your opinion?
this is what I read in a Sunday paper yesterday:
mainly for small companies at year end - "window dressing balance sheet using director loans to prop up the balance sheet and reduce the amount of debt on the day."
I cant understand how the loans would lower the amount of debt; even if the company pays a big debt with that loan, the loan will still have to be on the balance sheet as a debt to the director to be paid later.
so the amount of debt basicly remains the same in my opinion, unless a loan from a director doesn`t look so bad.
what is your opinion?
