we spend $10 million buying the company that owes $5 million in debt, we now own a company with $5 million in debt. We have to service the debt. What we can take out of the company will be cut by the cost to carry the debt until we pay it off. What about the company with $5 million in cash? If we spend $10 million buying that company, we can immediately use the cash and any profits. The company only cost us $5 million because we got the cash back.
