Gerald D'Cunha

T here is a famous accounting ratio, called Debt-Equity Ratio. ‘Debt’ means ‘Borrowed Funds’ or ‘Loan Funds’ or ‘Owed Funds’. “Equity’ means ‘Owners’ Funds’ or ‘Own Funds’. As a teacher of Accountancy, I have been teaching and discussing this ratio, among other accounting ratios, in my class, for decades. One of the hardest truths to digest about this ratio is the so-called standard Debt-Equity Ratio: It’s considered to be 2:1. It means, that your business is likely to thrive if your borrowed funds are at least double the size of your own funds. Funny, isn’t it? No, not for entrepreneurship. It’s argued, that if you want to grow faster, you need to take risks… Borrow money at interest… Mortgage, hypothecate and pledge every asset you own… And, be smart: Make so much profits, that you are able to pay off all your overheads, interest and taxes and still make profits for yourself and your fellow-partners or shareholders… If all goes as per the plan, every...

J io may be a smart – rather ‘clever’ – business idea. But, ‘Jio free-lunch’ mindset is not. The old wisdom applies here: ‘There is no free lunch in this world’. Somebody, always, pays for your free lunch… Often, it is you who pays for the free lunch without you knowing about it! Weeks ago, Tarun*, one of my eleventh-standard students, argued with me for over fifteen minutes over the Jio free-offer. “Sir, you should go for it… What is wrong with you?” “Nothing wrong with me beta ,” I convinced my student, “I am happy with my Vodafone.” “But, sir, why don’t you grab what is free?” Tarun pressed, “Why pay when you get it free?” “There is nothing free in this world, dear,” I tried playing a philosopher, “Someone pays for it.” “I don’t care who pays for it, sir,” Tarun was clear about what he was talking about, “as long as I don’t pay for it.” That was weeks ago, when Jio was sending everyone dizzy… Now, after crossing - what Mukesh Ambani proudly c...