Equity is the cushion that protects financial institutions from unexpected changes in the value of their assets. The greater the leverage, the smaller the losses required to wipe out a company's equity, leaving it without enough money to repay the people who hold its debt.
Some companies use off-balance-sheet partnerships to raise money or to buy assets without ever telling their shareholders in their financial statements.
African runners regularly work out in the United States and Europe, and the International Olympic Committee sends some of the cash from the Games to Olympic committees in poor nations, which use the money to finance their own programs.
Information technology departments must spend enormous amounts of time and money worrying about integrating big computer systems with billions of pieces of customer data.
Fannie Mae has never publicly disclosed how much money it could lose if interest rates rose 1.5 percentage points in a very short period of time.
Federal laws against kickbacks bar pharmaceutical companies from directly giving money to patients for co-payments on the drugs they make.
In a Ponzi scheme, a promoter pays back his initial investors with money he has raised from new investors. Eventually, the promoter can no longer find enough new investors to pay off the people who have already put up money, and the scheme collapses.