Why do most enterprises operate in debt? Where did all the money go?

According to the law of economics, the profitability of a company is greater than its financial profitability, otherwise it will not start a company, but save money. 5% of the borrowed money can create 10% or even higher profits. This is the root cause of the company's debt. Money, that is, money is just a medium of exchange and money is meaningless. The debt of an enterprise is actually equivalent to providing money to the society. The flow of money represents a transaction. In the commodity economy, behind the transaction is human productive labor.

Debt is sometimes necessary for business operations. Just give an example. There are also mutton kebabs on the roadside selling beer, but these beers are not bought by the stall owner, but are put on the stall by the beer supplier and sold by the mutton kebabs stall owner. The stall owner only gives money to the supplier when the beer is sold out, and can return it to the supplier if it is not sold out. This batch of beer is the debt of the mutton kebab owner.

From real estate companies to mutton skewers, there are a lot of debt operations to improve operating efficiency, and each mutton skewer can have a large amount of beer inventory. Otherwise, you can't save much beer with the money of mutton kebabs vendors. If you eat half a day, there will be no beer, and this business will not go on.