Leveraging Assets...Risky Business?

It is a common belief amongst most businesses that a debt to equity ratio should be increased to properly leverage assets. In finance and accounting classes the level of "healthy" leveraging is taught. If you as a business owner brought your balance sheets to an accountant with no debt, it is likely that the accountant or financier will instruct you to leverage your assets by introducing debt into your company.

Economic principles would agree with the accountant. If the marginal revenue (ROR) on investment is greater than the marginal cost (interest rates) then leveraging your assets is in your economic interest. However, what is not discussed in most educational institutions or by accountant/financiers is the fact that debt is equivalent to risk. A company with adequate savings to fund future projects and no debt, may not have the maximum assets/revenue, but they also have the least amount of risk.

When examining this idea I would like to focus on variances/risks. When expamining expansion via debt their is a variance on the availability of credit, level of interest rate, and the ROR on the project. In the previous example the accountant/financier/economist is correct, leveraging assets is sound for expanding revenue streams, but in doing so business owners should be well aware of the extra risk they are exposing themselves to.

Any business owner leveraging their assets from May 2008-Oct 2008 (present) has seen the risks that are associated with leveraging.

Epic Recipes for The Simple Cook

The foundation of excellent cooking is creativity. A creative cook is able to cover the 4 basics of high quality cuisine: smell, taste, texture, and appearance. The first goal in cooking is to develop food that smells and tastes good; without an appealing smell and a good taste food will obviosuly not be pleasing. An advanced cook must also focus on the texture and appearance of their meals. Texture and appearance are the hardest aspects of any recipe. When preparing new recipes all four basics should be covered, but as a beginning cook focus on smell and taste.


Here are 2 recipes for any cook to use. Guys a cheap and excellent date is to cook for a woman, here are 2 appetizers read later for main courses.


BA Rap

Ingredients (~$8 for 5 people)

Bacon
Diced Garlic
Fresh Ginger
Sweet Red Pepper Cut in Strips (Length-wise from stem to base)
Asparagus

Preparation

1. Cut the asparagus approximately 1/3 from the base and clean the asparagus.
2. Blanch Asparagus by boiling asparagus for 3-4 minutes.
3. Remove asparagus and drop in ice water .
4. Lay out raw bacon, take one end of bacon and place 2-3 pieces of asparagus, a slice of red pepper, garlic, and ginger on the bacon. Roll the bacon such that garlic, ginger, pepper, and asparagus are secured and bacon is spread across asparagus. Use a toothpick to secure bacon.
5. Grill the BA Raps on an open flame at medium heat until bacon is cooked.


Orange Taco with Steak

Ingredients ($10 for 5 people)

Large Ripe Orange
Steak (Higher Quality Cuts are Better)
Cilantro
Siracha (aka Hot Cock Sauce, The International Solvent)
Honey
Lime Juice
Mayonnaise


Preparation

1. Peel the orange making sure to not damage the slices. Pull slices from whole until all pieces are free and undamaged.
2. Grill steak to medium rare and cut to small pieces.
3. Dice cilantro.
4. Mix 1 part Siracha, 2 parts Honey, a splash of lime juice, and 1 part mayonnaise throughly in a small dish.
5. Cut the outside of the peeled orange slices length-wise as to butterfly the orange slices. Do not cut through orange, simply make a pocket in the orange.
6. Stuff steak pieces in orange then top with cilantro and sauce.