Debt : The essence of wealth is ‘debt.’ Liabilities are regarded as debt capital and included as assets in accounting . Isn’t it odd? Debt is classified as an asset... The fundamental idea that currency is created based on the principle that debt arises is crucial. Debt can serve a positive purpose by lowering opportunity costs , but it can also be harmful if not repaid, as it deprives others of their opportunity costs since it must be paid back. Managing debt properly is essential for a company's capabilities in certain situations. Understanding others’ debts can help maintain good credit. However, there are limits to examining others’ debts. Instead, we can monitor the flow of money as an apparent interest rate. Therefore, recognizing and responding to interest rate fluctuations during economic activities is extremely important. - Joseph’s “just my thoughts”
Tesla earns revenue through car sales, but its real profits come from other sources. Although Hyundai-Kia Motors sells more cars annually than Tesla, it does not have the same profit structure, which is unique to Tesla. Tesla capitalizes on environmental assets by selling carbon credits each year. While the company experiences overall losses in car sales, the sale of these carbon credits results in surplus income, positively affecting its stock price. Traditional automakers contribute to Tesla’s profitability by purchasing cars and paying fines for carbon emissions. This dynamic is also a key reason why Tesla establishes operations in regions with strict pollution regulations. - Joseph’s “just my thoughts”