Businesses use debt as a tool. It doesn't mean they don't also have revenue and cash reserves -- it just means they have calculated they will be better off leve

Businesses use debt as a tool. It doesn't mean they don't also have revenue and cash reserves -- it just means they have calculated they will be better off leveraging debt than spending cash for certain things. Think about it this way -- if you wanted to buy a car, and you had enough money in the stock market, you could sell your stocks and pay cash for the car. Or, you could get a car loan at a pretty low interest rate. Why would you take the loan? You might take the loan because the money you would make by leaving your cash in the stock market (and avoiding capital gains taxes triggered by selling shares) would almost certainly be larger than the interest you would pay on a car loan. So it might make sense to take the loan and leave your investments alone. There are not a lot of personal decisions that turn out like that, but a lot of business decisions turn out like that.