Here we go deeper on the Debt option from the previous lecture on different financing strategies.

Even if you have cash on hand to fund your deals, debt is a bit of a "magic trick" when applied responsibility.

To simplify things, in this video we assume "profit" is cash available to pay off your debt balance. In reality (as you learned in the quantitative analysis walk-through), you would need to subtract taxes, changes in working capital, capital expenditures, and interest expense first.