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Jehova's avatar

Seems like a way to pad the books for transactions. Based on my level 1 knowledge of balance sheets,

Reliance retail selling stuff will create trade receivables, cash conversion cycle ratio, asset turnover ratio, sales, profit, free cash flow

Jio leasing buying it will increase assets and inventory, reduce tax liability, offset profits by claiming depreciation

Leasing inventory out to jio will increase revenues, profits, build a business history, keep 100% of assets and have next to 0% operational costs and still get revenue, increase ROA, ROCE, and finally jio financial won’t just be a hype company but an actual business o n the books.

Reliance Jio ( the buyer) leasing equipment will reduce legal liability, create business expenses so shareholder profit mightbe reduced on reliance industries side so promoters can pocket more via other subsidiaries, tax liability is further reduced in expenses.

Also, this means the other companies will have good standalone balance sheets, instead of just good consolidated ones, setting them up as individual entities that can borrow money, leverage their non existing assets to increase influence, outreach and capital

Or I’m a complete moron and all this is garbage. Billionaires don’t do infinite money glitches. /s

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Ankit's avatar

If they want to lend me a router, I am fine with it. As long as they lend me the router that I want and I get to keep it after I've paid it off.

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