DW8 Growth, page-71

Answering question of raising CR. Two aspects.

1. Company A is raising CR for its own survival. For high debt burden or paying out suppliers or so on. U wull be busy in determining new deeds with financial institutions, they gonna make sure u have a rapayment capacity. They can ask you for tougher corrections within your company. This type of CR will have negative impact on SP. The investors gonna realise straightaway that the financial health is not so good. This will have negative impact on investors mind. The confidence would decrease and rightly so.

2. Company B is raising CR for none of the reasons above but for business expansion,growth prospects, global expansion etc. You know there is a potential, a future prospect which can blast this SP. The effect would be and should be minimum. Often these type of CRs viewed as good and does nt effect much. I mean look at APT for an example.

later is entirely different,.the first one is for survival and recovery with a hope to reach at the top, later is for expansion and growth with existing prospects.

that is why it is said, CR is NOT ALWAYS BAD.