Many of our distinguished legislators are questioning why a trading company has the barest capital to transact billions with the govt. Its a trading company that is why and relies on credit and trust of its suppliers. It is contingent upon shipping companies, factories and airlines to have huge equity
But not for a trading company. We ran a supermarket before and we were running at 90% debt to equity The suppliers whose sales manager were the old school network trusted us with their merchandise on credit
A hardware company with chain of stores I learned had most of their goods on consignment
There seems to be nothing wrong with the little trading company capitalized only a small fraction of the total deal Especially if they are friends of the suppliers,
