Alamo Airways purchase or leases its entire aircraft ﬂeet. Since Alamo already has too much debt, they would prefer off-balance-sheet ﬁnancing, which can be achieved using:
A) Finance leases
B) Operating leases
C) Bank debt
D) Convertible bonds

Question

Quizplus · Accepted Answer

Operating leases are considered off-balance-sheet financing because they do not require the company to list the lease as an asset or liability on the balance sheet, allowing the company to keep its debt levels lower in appearance.

Alamo Airways Purchase or Leases Its Entire Aircraft ﬂEet