In relation to financial statement analysis, Please respond with a summary/perspective to the following discussion reply: The debt-to-equity ratios for Carvana and Carmax are as follows - industry averages also provided for reference: 2020 2019 2018 2017 2016 Carmax 4.59 4.58 4.27 4.24 3.98 Carvana 5.76 19.02 9.58 2.88 1.49 Industry Average 6.22 3.98 5.09 3.2 2.45 I found an article in International Journal of Agricultural Management and Development that did an excellent job of breaking down the advantages and disadvantages of issuing stock vs. long-term debt. I have arranged these findings in a table for this discussion post: Issuing Stock Advantages Disadvantages No personal guarantee is needed Dividends cannot be reduced No collateral is required The owner finds a new partner No regular cash payments are needed This method is too expensive Such investors may be investors with added value The entrepreneur may lose his/her power Stock investors cannot force the company into bankruptcy Financing through Debt Advantages Disadvantages Since the interest of mid-term loans is nearly constant, the borrower company will gain a large benefit from these loans if the profit from these loans is more than the cost of interest Financial leverage resulting from medium term loan can lead to a decline in the profits of the company, as the interest rate is relatively constant The borrower company can typically negotiate about the conditions of the loan with the bank or lender; therefore, the repayment terms can be complied with the financial position Negative terms included in this type of loan agreements reduce the company's maneuverability and investment in the financing projects Companies that are eligible for issuing commercial papers due to improvement in their financial position can negotiate with the bank without giving collateral for long-term lending with low rates Where companies have put some of the items of their assets as collateral, they cannot put it back as collateral again without the consent of the creditor Paying annual installments may exert great pressure on the company's liquidity, because the company shall pay a large amount of money in each installment as the principle and interest of loan. References CarMax. (n.d.). Retrieved January 13, 2022, from How the Market Works: https://www.howthemarketworks.com/quotes/quotes?type=financials20yr&symbol=KMX Carvana. (n.d.). Retrieved January 13, 2022, from How the Market Works: https://www.howthemarketworks.com/quotes/quotes?symbol=cvna Nashtaei, R., Chirani, E., & Chegini, M. (2017). External Financing Method: Financing through Debt and Stock Issuance. International Journal of Agricultural Management and Development (IJAMAD), 07(4), 517-524. Ready Ratios. (n.d.). Retrieved January 13, 2022, from https://www.readyratios.com/sec/industry/55/?measure=average