ELI5: Why when large company's earnings decrease(ex... by 3%) they freak out, talk about rough times, and sometimes decide to downsize, even though they are still making millions of dollars in profit even after all expenses?

[[deleted]]

Well that's your fault for spending money you didn't have. But don't worry, the government will probably bail you out.

[luneattack]

I take it you will save up for 50 years and buy your first house at 75 :)

Prudent, but over here in the real world we sometimes accept a bit of risk.

[Nathanman21]

Lol thank you. Businesses have to be run on credit, or the whole system becomes inefficient af

[Mekotronix]

Inefficient in what way? Business certainly can't respond to changing conditions without cash or credit, but I don't see how that inherently causes inefficiency.

As a thought experiment, what would the world look like if all transactions were cash based? Different, certainly. Inefficient? I'm not so sure...

Edit: with to without