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The Institute of Chartered Accountants of India • 2m
Equity vs. Debt - What’s Better for Business Funding? 🤔 Let’s break it down with a simple example: Both scenarios (A & B) start with the same revenue and cost structure. But there's one key difference - the funding source. Scenario A: Funded entirely through equity Scenario B: Funded with debt, incurring ₹500 interest Key Insight: Despite interest expense in B, the tax savings (₹150) make a significant impact. Result - Higher cashflow in Scenario B: ₹1050 vs. ₹900 in Scenario A. This is the power of the debt tax shield.🔥 However, while debt improves cashflow, it also increases financial risk. The optimal choice depends on your risk appetite and business stability. Moral: Leverage can work for you - if managed wisely. Note: Debt is better if ROI > Cost of Debt Would you go with equity or debt for your startup?
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The Institute of Chartered Accountants of India • 5m
How to save Taxes!!! iykiyk -- Part 1. Taking Debt/Loan as funds is best way eliminate taxes than raising Equity shares. as Debt is charged against profits and interest is deducted before imposing tax rate. Also, Be sure that the ROI is higher tha
See MoreCA Aspirant|Content ... • 15d
Daily dose of financial ratios by Anirudh Gupta Debt/equity ratio =Total debt/Shareholders equity Purpose: It helps users of financial statements understand how much debt the company is using for every ₹1 of equity invested by shareholders. Cred
See MoreHey I am on Medial • 1y
why indian Startups are opting for Debt financing? 1. Preserving equity: Debt financing allows startups to raise capital without diluting their equity and ownership. This is important for founders who want to maintain control of their company. 2
See MoreCA Aspirant|Content ... • 14d
Daily dose of financial ratios by Anirudh Gupta Debt service coverage ratio: =Earnings available for debt services/(Interest+Installments) Where earnings available for debt services are EBITDA or EBIT based on the case. Purpose: -Yesterday,we d
See MoreInvestment Lead at M... • 1m
Get Started - 11 Our Poll 7(medial.app/post/6845b975d8f52f7fe0a6717c) revealed that after "Juggling Cashflow" (which we've roasted enough), "Tax and Governance Tangle" is your second biggest headache! We’ve already unraveled the cashflow mess in ea
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