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Saddling High Levels of Debt

During the 1970's, the managers of Ling-Temco-Vought, Inc. (LTV)—manufacturers of aircraft and aircraft related electronics, borrowed heavily to exploit the advantage of financing operations with debt. At first the airlines were making profits; their operating income a lot higher than interest expenses. Unfortunately as the business cycle turned, the company was unable to continue making profits, reporting losses. Their expenses were a lot higher than their interest income. This burdened the company with a lot of debt, and hence pushed the company to the brink of bankruptcy.
Airline manufacturing is one of the riskiest industries. The major cost of airline industries is money spent on research and development. Products of the aerospace industries are very expensive, a lot of money is spent on researching products that might not even leave the drawing board, even if the product finally leave the drawing boards, there is no guarantee that......

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Approximate Word Count: 566
Approximate Pages: 3 (250 words per double-spaced page)

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