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Do you think it is a good idea for a company to have liabilities (debt) when running their business? Why or why not?

Because the economy is slowed, the pizza shop business is down by 20%. You are thinking about taking out a further loan - should you?

Qs you need think about and ask?

· Do we have enough assets to secure an additional loan?

· How much money is owe to us?

o Is our credit policy too lenient?

· How much do we owe, how much is due soon?

· If we have to pay all out debt back today , would we have enough money to cover it or do we have to start selling anything that is not nailed down?

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