Borrowing company uses relatively more debt to finance assets than Lowdebt corp. These companies are approximately the same size and operate in approximately the same way with similar EBIT. Because of the difference in debt Borrowing's Net Income is expected to fall a greater percentage than Nodebt when Revenues fall. Borrowing will have lower tax deductions than Nodebt. Borrowing will be in a more secure place if there is a general economic downturn which is expected to lower sales. Nodebt will definitely have higher Net Income than Borrowing. Borrowing will have lower overall risk than Nodebt